In case you have crossed the threshold limit or want to become 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 are a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby decrease your costs as well as improve your business cash flow.
Several eu countries like 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 new business in the UK and have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely apply for vatregistrationnumber.com vat registration with the HM Revenue and Customs or hmrc department. You can even apply before threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be achieved as being 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 if you sell your goods and services locally in the United Kingdom at the retail level then you may choose to remain outside vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities only 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 as it will avoid the problem of double taxation by permitting you to reclaim vat already paid on services or goods overseas too.
The whole 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 handle 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 using your vat agent too provided you inform the department of your choosing. As soon as you apply for vat registration then the procedure for approving your 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 take into account applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from their end.
Once your application is approved then you will receive your distinct vat registration number and may have 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 breakdown of all vat paid and collected in your vat returns that 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 certainly try for vat reclaim once you’re a certified vat registered trader.
Vat registration is a simple online process that needs to be done first if you wish to turn into a vat registered trader in the United Kingdom. You can simply fill up the web based vat registration form and submit it to the hmrc vat department when you apply for registration for vat.