In case you have crossed the threshold limit or want to be a part of the vat or value added tax system then you’ll need to apply 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 as well as enhance your business earnings.
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 countries. If you have started a new business in the United Kingdom 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 can even apply before this threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be done as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you make an application for vat registration then 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 opt to remain outside vat should you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities simply to remain away from system of vat then this hmrc vat department may not take your actions lightly in case you are discovered doing the same. There are several benefits of entering the vat system as it will prevents the problem of double taxation by allowing you to reclaim vat already paid on goods or services in another country too.
The entire process for registration for vat is pretty simple however, if you aren’t sure about yourself then you should simply appoint a professional 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 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 process of approving the application typically takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, during that period you will have 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 distinct vat registration number and may need to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will probably 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 need to give a breakdown of all vat paid and collected within your vat returns which will need to be filed periodically as needed 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 a certified vat registered trader.
Vat registration is a simple online procedure that needs to be done first if you want to turn into a vat registered trader in the UK. You can easily fill up the web based vat registration form and submit it to the hmrc vat department whenever you make an application for registration for vat.