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. Once you 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 improve your business earnings.
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 even while trading between member eu countries. In case you have started a new business vatnumbers.com in the United Kingdom and also have touched ?70,000 pounds in taxable sales in the past 1 year 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 apply for vat registration your costs could increase slightly, and when you sell your products or services locally in the United Kingdom at a retail level then you may opt to remain outside vat if you only sell vat exempt goods. However, if you try to artificially try to separate your business activities only to remain away from system of vat then this hmrc vat department may not take your actions lightly if you’re discovered doing the same. There are several benefits of entering the vat system as it will prevents the problem of double taxation by permitting you to reclaim vat already paid on services or goods overseas too.
The entire process for registration for vat is quite simple however, if you aren’t sure about yourself then you 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 can apply for vat through your vat agent too provided you inform the department of your choice. As soon as you apply for vat registration then the procedure for approving the application usually takes between 10 to 30 days. Until then you can continue 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.
Once your application is eligible then you will receive your distinct vat registration number and will have to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will probably have 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 need to give a breakdown of all vat paid and collected within your vat returns that will have to be filed periodically as required by the hmrc vat department. If you have already paid vat on products or services in another eu country then you can try for vat reclaim once you are an official vat registered trader.
Vat registration is a simple online process that needs to be done first if you want to turn into a vat registered trader in the UK. You can simply fill up the online vat registration form and submit it to the hmrc vat department whenever you make an application for registration for vat.