If you have crossed the threshold limit or wish to be 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. 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 as well as enhance your business earnings.
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. In case you have started a fresh business vatnumbers.com in the United Kingdom and also 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 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, once you apply for vat registration your costs could increase slightly, and if you sell your products or services locally in the UK at the retail level then you could opt 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 only to remain outside the system of vat then this hmrc vat department may not take your actions lightly if you’re discovered doing precisely the same. There are many advantages of entering the vat system as it will prevents the problem of double taxation by permitting you to reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is pretty simple however, if you aren’t 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 apply for vat through your vat agent too provided you inform the department of your choice. Once you apply for vat registration then the procedure for approving your application usually takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, in that period you will need to factor in applicable vat rates and re-issue those invoices issued after the application so your clients can reclaim vat from their end.
Once your application is approved then you will receive your unique vat registration number and will need to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will also 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 have to give a summary of all vat paid and collected in your vat returns that will have 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 apply for vat reclaim once you’re an official vat registered trader.
Vat registration is a straightforward online procedure that has to be done first if you want to turn into a vat registered trader in the UK. You can simply fill the web based vat registration form and submit it to the hmrc vat department when you apply for registration for vat.