In case you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you’ll need to make an application for registration for vat to turn into a vat registered trader. When you finally are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also enhance your business earnings.
Several eu countries like 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 UK and also have touched ?70,000 pounds in taxable sales in the past 12 months then you can 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 achieved 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 when you sell your goods and services locally in the UK at the retail level then you could opt to remain outside vat if you only sell vat exempt goods. However, if you try to artificially try to separate your business activities simply to remain outside the system of vat then the hmrc vat department might not take your actions lightly if you’re discovered doing precisely the same. There are several benefits 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 overseas too.
The entire process for registration for vat is quite simple but if you are not 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. Once you make an application for vat registration then the procedure for approving your 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 your application so your clients can reclaim vat from other end.
As soon as your application is eligible you will receive your unique 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 have to issue a vat invoice that separately shows all vat rates applied in the invoice along with your vat no at the very top. You will need to provide a summary of all vat paid and collected in your vat returns that will have to be filed periodically as needed by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can certainly apply for vat reclaim once you’re an official 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 UK. You can easily fill up the web based vat registration form and submit it to your hmrc vat department whenever you apply for registration for vat.