If you’re a trader in the United Kingdom with rising taxable sales you will need to pay uk vat to enjoy all benefits provided by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 during the past https://vatnumbers.com Twelve months then you need to apply for vat registration so that you too can become part of this tax system that’s in force in the majority of Europe.
If you are a really small trader that mostly sells retail goods you’ll be able to remain from the purview of vat or value added tax so long as your taxable sales do not touch ?70,000 in Twelve months. However, in case your sales touch that figure or let’s say you sell goods to vat registered traders you would be better off as a vat registered trader in the United Kingdom. Vat continues to be employed as a means of collecting taxes on goods and services in the majority of of Europe as well as the UK too follows this method. The vat department in the United Kingdom is headed by HM Revenue and Customs or hmrc department.
Once you have crossed over the vat threshold limit for uk then you will need to apply for vat registration. That can be done even before you reach this limit if you think that you have to reclaim vat that has already been paid on services and goods, especially in a foreign eu country where this system is followed. You ought to do the hiring of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds to ensure that there are no problems in claiming back vat.
As soon as you do turn into a vat registered trader in the UK, which could take up to a month once you file an online vat application then you will have to charge vat as per the 14,000 services and goods classifications provided by the hmrc vat department. This will likely need to be done through each vat invoice that you will be needed to issue during each taxable sale. UK has 3 vat rates starting with the standard rate of 17.5%, reduced vat rate of 5%, as well as the zero vat rate. Certain goods and services are totally vat exempt too.
As soon as you turn into a vat registered trader so as to pay and collect uk vat determined by vat invoices then you’ll also have to file your vat returns on a regular basis. Again, your vat agent is going to be required to calculate vat to get paid or refunded based on your vat purchases and sales. If you have imported services or goods in the UK after paying vat within a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc and the member country. Overall, vat is an excellent tax system to prevent double taxation and also plug many loopholes that were present in the traditional sales tax system.
If you’re a growing trader in the UK that sells taxable goods to vat registered traders then you will want to keep the cycle of vat alive by getting to be a vat registered trader. Now you can collect and pay uk vat while also claiming any vat previously paid on imported products or services, which will will reduce your tax overheads to a large extent.