If you’re a trader in the UK or any other EU country that has adopted or vat to be a way of collecting taxes then for supplying vat registered traders it makes sense to sign up for vat. You will be able to pass on vat benefits to the customers while also having the ability to reclaim vat that might have previously been paid in another country.
In the United Kingdom you are able to register as being a vat registered trader regardless of whether you are an individual operating a business, a partnership, a club, a company, an association, or any other vat numbers type of organisation. Basically, for anyone who is dealing in services or goods that attract vat then you can certainly get registered for vat. Additionally, if your main clients are vat registered dealers it definitely is a good idea that you continue the vat tax chain and turn a vat registered dealer.
If your taxable sales cross over the vat threshold limit of ?70,000 in the previous Yr then you’re entitled to vat registration. However, you can even volunteer to obtain registered for vat before crossing the threshold limit too. Vat is an efficient method of taxing products or services so as to prevent the problem of double taxation and even bring about transparency within the tax system. If you are planning to import services or goods into the UK and then sell them locally then you can also apply for vat refunds as soon as you become an official vat registered trader. You will need to apply at the HM revenue and customs department or hmrc department, which in turn will forward your refund application towards the concerned eu country.
As soon as you sign up for vat with the hmrc department and turn into an official vat registered dealer then you’ll need to issue a vat invoice that has been specified by hmrc. You will have to mention your vat number, vat rate and vat amount on the invoice. UK has 3 types of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some products or services with a social impact are usually vat exempt. You will first have to check with regards to which vat rate pertains to each product or service before you start issuing vat invoices and start charging the applicable rates.
The vat rules in several eu countries which have adopted vat are slightly different and if you intend to import goods from such countries then you will want to understand far more than simply what is vat. A professional vat agent with sufficient understanding of customs and excise duties which also knows all about uk vat and eu vat rules ought to be hired for smooth import of goods and services to the UK. Once you turn into a vat registered dealer then you’ll definitely also have to file vat returns at the hmrc specified periods. In case you deal in vat exempted goods then you will be unable to claim any vat refunds.
The hmrc offers vat registered dealers a chance to file their vat returns online itself. Your agent can also file the return on your behalf. However, before you become a part of the vat cycle you need to first sign up for vat in order that you can also enjoy all tax benefits offered by this tax system.