In case you have crossed the threshold limit or wish to become 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 turn into 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 enhance your business earnings.
Several eu countries like 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 in the UK and also 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 may also apply before this threshold limit is achieved if you sell your goods or services 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, once you apply for vat registration your costs could increase slightly, and when you sell your goods and services locally in the United Kingdom at a retail level then you could choose to remain outside vat if you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities simply to remain outside the system of vat then the hmrc vat department may not take your actions lightly if you’re discovered doing the same. There are many benefits of entering the vat system as it will prevents the problem of double taxation by allowing you to definitely reclaim vat already paid on goods or services in another country too.
The entire 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 deal with 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 choosing. Once you make an application for vat registration then this procedure for approving your application usually takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during that period you will need to factor in applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from other end.
Once your application is eligible then you will receive your distinct vat registration number and may have to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will probably have to issue a vat invoice that separately shows all vat rates applied in the invoice together with your vat no at the very top. You will have to provide a summary of all vat paid and collected in your vat returns which will need to be filed periodically as needed by the hmrc vat department. In case you have already paid vat on goods and services in another eu country then you can certainly try for vat reclaim once you are a certified vat registered trader.
Vat registration is a simple online procedure that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill up the online vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.