If you have crossed the threshold limit or want to become a part of the vat or value added tax system then you will need to make an application for registration for vat to turn into a vat registered trader. When you finally are a vat registered trader then you will 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 products or services. Vat is thus followed whilst trading between member eu vatvalidation.com countries. If you have started a new business in the UK and also have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely apply 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 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 make an application for vat registration then your costs could increase slightly, and when you sell your products or services locally in the UK at a retail level then you may choose to remain outside vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities simply to remain outside the system of vat then this hmrc vat department may not take your actions lightly in case you are discovered doing the same. There are many advantages of entering the vat system as it will prevents the problem of double taxation by allowing you to reclaim vat already paid on services or goods in another country too.
The whole 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 are able to make an application for vat using your vat agent too provided you inform the department of your choice. As soon as you make an application 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 have to factor in applicable vat rates and re-issue those invoices issued after the application so your clients can reclaim vat from other end.
Once your application is eligible you will receive your distinct vat registration number and will have to display it on all vat documents including 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 the invoice along with your vat no at the very top. You will need to give a breakdown of all vat paid and collected in your vat returns that will have 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 apply for vat reclaim once you are an official vat registered trader.
Vat registration is a straightforward online process that needs 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 the hmrc vat department when you apply for registration for vat.