If you have crossed the threshold limit or want to be 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 you will then 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 including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed even while trading between member eu countries. If you have started a fresh business vatnumbers in the UK and have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely make an application 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 done 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 then your costs could increase slightly, and when you sell your goods and services locally in the UK at the retail level then you may opt to remain outside vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your enterprise activities only to remain away from 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 services or goods overseas too.
The whole process for registration for vat is quite simple however, if you aren’t sure about yourself then you 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 using your vat agent too provided you inform the department of your choice. As soon as you apply for vat registration then this procedure for approving your application typically takes between 10 to 30 days. Until then you can keep 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 the application so that your clients can reclaim vat from other end.
As soon as your application is approved you will receive your unique vat registration number and will 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 that invoice together with your vat no at the very top. You will need 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. In case you have already paid vat on goods and services in another eu country then you can try for vat reclaim once you’re a certified vat registered trader.
Vat registration is a simple online procedure that needs to be done first if you want to turn into a vat registered trader in the United Kingdom. You can simply fill up the online vat registration form and submit it to your hmrc vat department when you apply for registration for vat.