If you have crossed the threshold limit or want to become a part of the vat or value added tax system then you will need to make an application 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 as well as enhance 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 whilst trading between member eu countries. In case you have started a new business in the UK and have touched ?70,000 pounds in taxable sales during the past 12 months then you can 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 goods or services 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 products or services locally in the United Kingdom at a retail level then you may choose 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 away from system of vat then the hmrc vat department may not take your actions lightly in case you are discovered doing precisely the same. There are several benefits of entering the vat system since it will avoid the problem of double taxation by allowing you to definitely reclaim vat already paid on services or goods overseas too.
The entire process for registration for vat is quite simple however, if you are not sure about yourself then you definitely should simply appoint an expert 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 process of approving your application typically takes between 10 to 30 days. Fo the time being you can keep issuing regular invoices to your clients. However, during that period you will need to factor in applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from other end.
As soon as your application is approved you will receive your unique vat registration number and can need 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 very top. You will need to provide a breakdown of all vat paid and collected within your vat returns which will have to be filed periodically as needed by the hmrc vat department. In case you have already paid vat on goods and services in another eu country then you can certainly try for vat reclaim once you are a certified vat registered trader.
Vat registration is a straightforward online process that needs to be done first if you wish to turn into a vat registered trader in the UK. You can simply fill the online vat registration form and submit it to your hmrc vat department whenever you make an application for registration for vat.