If you’re a trader in the United Kingdom with rising taxable sales you will need to pay uk vat to relish all benefits provided by this taxation system. Once your taxable sales touch the vat threshold limit of ?70,000 during the past 12 months then you’ll need to get vat registration so that you too can end up part of this tax system that is in force in the majority of European countries.
If you’re a really small trader that mostly sells retail goods you’ll be able to remain out of the purview of vat or value added tax so long as your taxable sales don’t touch ?70,000 in 12 months. However, if your sales touch that figure or if you sell goods to vat registered traders you would be better off being a vat registered trader in the United Kingdom. Vat has been employed as a means of collecting taxes on products or services in most of Europe as well as the UK too follows this system. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.
After you have crossed over the vat threshold limit for uk vatnumbersearch.com then you will need to make an application for vat registration. You can do so even before you reach this limit if you feel that you need to reclaim vat that has previously been paid on goods and services, especially in a foreign eu country where this method is followed. You should hire the services of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds to ensure that there aren’t any problems in claiming back vat.
As soon as you do turn into a vat registered trader in the United Kingdom, which could extend to a month after you file an online vat application then you’ll have to charge vat according to the 14,000 services and goods classifications given by the hmrc vat department. This will have to be carried out by each vat invoice you will be needed to issue during each taxable sale. UK has 3 vat rates beginning with the regular rate of 17.5%, reduced vat rate of 5%, and the zero vat rate. Certain services and goods are totally vat exempt too.
Once you are a vat registered trader so as to pay and collect uk vat based on vat invoices then you’ll also have to file your vat returns regularly. Again, your vat agent will be necessary to calculate vat to get paid or refunded based on your vat purchases and sales. If you have imported goods or services in the UK after paying vat in a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You’ll be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc and the member country. Overall, vat is an excellent tax system to avoid double taxation as well as plug many loopholes which were present in the traditional sales tax system.
If you are a growing trader in the UK that sells taxable goods to vat registered traders then you need to maintain the cycle of vat alive by turning into a vat registered trader. You can now collect and pay uk vat while also claiming any vat previously paid on imported goods and services, which will will lower tax overheads to some large extent.