Claim reverse charge vat on services where vat was already paid

If you are a vat registered trader in the UK then you can avoid the problem of double taxation on services utilized from foreign companies whenever you claim reverse charge vat on services where vat has already been paid. This vat procedure allows you to first pay vat and after that cancel it out so that your net cost does not increase.

If you’re a trader that utilizes services of foreign companies, particularly those situated in vat-friendly eu countries then you certainly might have already paid vat in those countries. Alternatively, you might also have received such services in Britain itself from the supplier situated in a eu country. All these factors would turn out boosting your expenses since you could end up paying vat on certain services including those linked to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification vatnumbersearch regulations.

In case you have a little difficulty in interpreting these vat rules you then should enrol the expertise of a competent customs and excise customs vat agent having a wide reach in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and may help you to claim reverse charge vat that might have already been paid to a foreign company located in another country together with a vat-friendly eu country.

You are able to reclaim vat already paid for specified services while filing your vat returns itself. If you are in the UK then you will have to calculate and indicate how much paid in Box 1 of the vat return form. You will then have to specify the same amount in Box 4 of the return to ensure the amount stands cancelled. You will also need to specify the total quantity of the provision in Box 6 and 7 in the vat return form so as to complete your reverse charge vat claim. However, you will have to convert the currency of the vat paid in a foreign country to sterling before you fill in the amounts in those boxes.

This reverse charge process can also be known as tax shift and you may go in for this type of vat reclaim only when you are a vat registered trader in Britain. In order to be a vat registered trader, your taxable sales need to cross over ?70,000 in the last 1 year while you may even apply before this vat threshold amount has been achieved. As soon as you start charging vat to the customers and file regular vat returns then any services rendered by you an overseas company could be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.

Although following vat rules usually are not really hard, it is always better to choose services of a proficient vat agent that can handle all your vat requirements seamlessly. This will likely allow you to concentrate on boosting your business while your vat agent files for reverse charge vat and recovers your taxes which may have previously been taken care of services rendered by way of a foreign company within or outside the UK.