In case you have crossed the threshold limit or want to become a part of the vat or value added tax system then you’ll need to make an application for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby lower your costs and also enhance your business cash flow.
Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed whilst trading between member eu countries. If you have started a fresh business in the UK and also have touched ?70,000 pounds in taxable sales in the past 12 months then you can definitely make an application for vat registration with the HM Revenue and Customs or hmrc department. You may also apply before threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be achieved as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you make an application for vat registration your costs could increase slightly, and if you sell your goods and services locally in the United Kingdom at the retail level then you may opt to remain outside of vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities simply to remain outside the system of vat then the hmrc vat department may not take your actions lightly if you’re discovered doing the same. There are several advantages of entering the vat system since it will prevents the problem of double taxation by allowing you to definitely reclaim vat already paid on services or goods overseas too.
The whole process for registration for vat is quite simple but if you aren’t sure about yourself then you definitely should simply appoint an expert vat agent to deal with all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You are able to make an application for vat using your vat agent too provided you inform the department of your choice. As soon as you make an application for vat registration then this procedure for approving your application usually takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, in that period you will have to factor in applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from their end.
As soon as your application is approved then you will receive your unique vat registration number and will need to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will also have to issue a vat invoice that separately shows all vat rates applied in the invoice along with your vat no at the top. You will have to give a breakdown of all vat paid and collected in your vat returns that will have to be filed periodically as needed by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can certainly try for vat reclaim once you’re a certified vat registered trader.
Vat registration is a simple online procedure that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill up the online vat registration form and submit it to the hmrc vat department when you make an application for registration for vat.