In case you have crossed the threshold limit or wish 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. Once you are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs as well as 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 whilst trading between member eu countries. If you have started a fresh business vatnumbers in the UK and have touched ?70,000 pounds in taxable sales in the past 1 year then you can definitely apply 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, as soon as you make an application 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 could choose to remain outside of vat should you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities only to remain outside the system of vat then this hmrc vat department might not take your actions lightly in case you are discovered doing precisely the same. There are several advantages of entering the vat system as it will prevents the problem of double taxation by allowing you to definitely reclaim vat already paid on goods or services in another country too.
The entire process for registration for vat is pretty simple but 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 make an application for vat using your vat agent too provided you inform the department of your choosing. Once you make an application for vat registration then this 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 need to take into account applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from their end.
As soon as your application is eligible you will receive your distinct vat registration number and will 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 along with your vat no at the very top. You will have to provide a summary of all vat paid and collected within your vat returns that will need 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 try for vat reclaim once you’re an official vat registered trader.
Vat registration is a straightforward online procedure 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 web based vat registration form and submit it to the hmrc vat department when you make an application for registration for vat.