In case you have crossed the threshold limit or wish 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 then you will 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 goods and services. Vat is thus followed whilst trading between member eu countries. In case you have started a fresh business in the United Kingdom and have touched ?70,000 pounds in taxable sales in the past vatregistrationnumber.com 1 year then you can definitely make an application 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 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 if you sell your products or services locally in the United Kingdom at a retail level then you may opt to remain outside of vat if you only sell vat exempt goods. However, if you try to artificially try to separate your business activities only to remain away from system of vat then this hmrc vat department may not take your actions lightly in case you are discovered doing precisely the same. There are several advantages of entering the vat system as it will avoid 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 but 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. As soon as you apply for vat registration then the procedure for approving your application usually takes between 10 to 30 days. Until then 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 their end.
As soon as your application is approved then you will receive your distinct vat registration number and will need to display it on all vat documents including 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 that invoice together with your vat no at the very top. You will have to provide a breakdown of all vat paid and collected in your vat returns which 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 are an official vat registered trader.
Vat registration is a straightforward online process that has to be done first if you want to turn into a vat registered trader in the UK. You can easily fill the web based vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.