If you have crossed the threshold limit or want to be a part of the vat or value added tax system then you will need to apply for registration for vat to turn into a vat registered trader. Once you are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also improve your business cash flow.
Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed whilst trading between member eu countries. If you have started a new business in the United Kingdom and have touched ?70,000 pounds in taxable sales during the past 1 year then you can make an application for vatregistrationnumber.com vat registration with the HM Revenue and Customs or hmrc department. You may also apply before threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be done as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you apply for vat registration your costs could increase slightly, and when you sell your products or services locally in the UK at the retail level then you could choose to remain outside vat should you only sell vat exempt goods. However, if you try to artificially try to separate your business activities only 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 since it will avoid the problem of double taxation by permitting you to definitely reclaim vat already paid on services or goods in another country too.
The entire process for registration for vat is quite simple however, if you aren’t sure about yourself then you definitely should simply appoint an expert vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You are able to make an application for vat through your vat agent too provided you inform the department of your choosing. Once you apply for vat registration then the process of approving the application usually takes between 10 to 30 days. Fo the time being you can keep issuing regular invoices to your clients. However, during that period you will have to take into account applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from their end.
Once your application is approved then you will receive your distinct vat registration number and can have to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will probably need to issue a vat invoice that separately shows all vat rates applied in that invoice together with your vat no at the very top. You will have to give a breakdown of all vat paid and collected within your vat returns that will need to be filed periodically as required by the hmrc vat department. If 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 straightforward online procedure that has to be done first if you wish to turn into a vat registered trader in the UK. You can easily fill the online vat registration form and submit it to your hmrc vat department when you make an application for registration for vat.