In case you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you will need to apply for registration for vat to turn into a vat registered trader. When you finally are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also improve your business cash flow.
Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed even while trading between member eu vatvalidation 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 this threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be achieved as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you make an application for vat registration then your costs could increase slightly, and when you sell your products or services locally in the United Kingdom at a retail level then you could choose to remain outside of vat if you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities only to remain outside the system of vat then this hmrc vat department may not take your actions lightly if you’re discovered doing precisely the same. There are many advantages of entering the vat system since it will prevents the problem of double taxation by permitting you to definitely reclaim vat already paid on services or goods in another country too.
The entire process for registration for vat is quite simple however, if you aren’t sure about yourself then you should simply appoint a professional vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can make an application for vat using your vat agent too provided you inform the department of your choosing. As soon as you apply for vat registration then the procedure for approving your application usually takes between 10 to 30 days. Fo the time being you can continue issuing regular invoices to your clients. However, during that period you will have to take into account applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from other end.
Once your application is approved then you will receive your unique vat registration number and may need to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will also need to issue a vat invoice that separately shows all vat rates applied in that invoice together with your vat no at the top. You will have to provide a breakdown of all vat paid and collected in your vat returns which will have to be filed periodically as required by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can certainly apply for vat reclaim once you are an official vat registered trader.
Vat registration is a simple online process that has to be done first if you want to turn into a vat registered trader in the UK. 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.