In case you have crossed the threshold limit or want to become a part of the vat or value added tax system then you will need to apply for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower 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 products or services. Vat is thus followed whilst trading between member eu countries. If you have started a fresh business in the UK and also have touched ?70,000 pounds in taxable sales in the past vatregistrationnumber 12 months then you can apply for vat registration with the HM Revenue and Customs or hmrc department. You may also 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 your costs could increase slightly, and if you sell your goods and services locally in the United Kingdom at a retail level then you may 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 many advantages of entering the vat system since 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 pretty simple but if you aren’t sure about yourself then you should simply appoint an expert 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 through your vat agent too provided you inform the department of your choice. Once you apply for vat registration then the process of 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 take into account applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from other end.
Once your application is eligible you will receive your distinct vat registration number and may have to display it on all vat documents as well as 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 the invoice together with your vat no at the very top. You will have to give a summary of all vat paid and collected within your vat returns which 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 try for vat reclaim once you are a certified vat registered trader.
Vat registration is a simple online process that has 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 whenever you make an application for registration for vat.