In case you have crossed the threshold limit or want to become a part of the vat or value added tax system then you’ll need to make an application 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 lower your costs as well as improve 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 have touched ?70,000 pounds in taxable sales in the past 12 months then you can apply for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before this threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be achieved 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 products or services locally in the United Kingdom at the retail level then you may 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 away from system of vat then the hmrc vat department may not take your actions lightly in case you are discovered doing precisely the same. There are several benefits of entering the vat system as it will avoid the problem of double taxation by permitting you to reclaim vat already paid on services or goods overseas too.
The entire process for registration for vat is quite simple but if you aren’t sure about yourself then you should simply appoint a professional 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. As soon as you apply for vat registration then the procedure for approving the application usually takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, in that period you will need to take into account applicable vat rates and re-issue those invoices issued after your 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 that invoice along with your vat no at the very top. You will have to give a summary of all vat paid and collected in your vat returns that will need to be filed periodically as required by the hmrc vat department. In case you have already paid vat on products or services in another eu country then you can certainly apply for vat reclaim once you are a certified vat registered trader.
Vat registration is a straightforward online procedure that needs to be done first if you want to turn into a vat registered trader in the UK. You can simply fill the online vat registration form and submit it to the hmrc vat department whenever you make an application for registration for vat.