If you are a vat registered trader in Britain you’ll be able to steer clear of 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 then cancel it so your net cost does not increase.
If you are a trader which uses services of foreign companies, especially those located in vat-friendly eu countries then you may have already paid vat in those countries. Alternatively, you might also have obtained such services in Britain itself from the supplier located in a eu country. All these factors would https://vatvalidation.com end up boosting your expenses as you could end up paying vat on certain services including those linked to land, property, intra EC-freight services, and other such services as defined by the HM Revenue and Customs or hmrc department along with the European Community simplification 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 with a wide reach practically 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 situated in another country together with a vat-friendly eu country.
You can reclaim vat already paid for specified services while filing your vat returns itself. If you are in the UK then you’ll have to calculate and indicate how much paid in Box 1 of your vat return form. You’ll then have to specify exactly the same amount in Box 4 of the return so that the amount stands cancelled. You will also have to specify the full quantity of the provision in Box 6 and 7 of the vat return form so as to complete your reverse charge vat claim. However, you will have to convert the currency of any vat paid in a foreign country to sterling before you decide to 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 if you are a vat registered trader in Britain. In order to be a vat registered trader, your taxable sales have to go over ?70,000 in the last 12 months although you can even apply before this vat threshold amount may be achieved. Once you start charging vat to your customers and file regular vat returns then any services rendered by you from an overseas company could be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department.
Although following vat rules usually are not very difficult, 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 already been taken care of services rendered by way of a foreign company within or outside the UK.