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 make an application for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also enhance 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 countries. In case you have started a new business vatnumbers in the United Kingdom and 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 threshold limit is achieved if you sell your goods or services 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, once you make an application for vat registration your costs could increase slightly, and if you sell your goods and services locally in the United Kingdom at the retail level then you may opt to remain outside of vat if 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 the hmrc vat department may not take your actions lightly if you’re discovered doing the same. There are many advantages of entering the vat system as it will prevents the problem of double taxation by permitting you to reclaim vat already paid on services or goods in another country too.
The entire process for registration for vat is pretty simple however, if you are not sure about yourself then you definitely 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 are able to make an application for vat through 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 your application typically takes between 10 to 30 days. Fo the time being you can continue 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 that your clients can reclaim vat from other end.
As soon as your application is eligible 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 also have to issue a vat invoice that separately shows all vat rates applied in the invoice together with your vat no at the top. You will have to provide 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 products or services in another eu country then you can try for vat reclaim once you’re an official vat registered trader.
Vat registration is a simple online procedure that needs to be done first if you wish to turn into a vat registered trader in the UK. You can simply fill the web based vat registration form and submit it to your hmrc vat department whenever you make an application for registration for vat.