If you’re a trader in the UK with rising taxable sales you will need to pay uk vat to relish all benefits provided by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 during the past www.vatnumbers.com Twelve months then you’ll need to apply for vat registration so that you can also become part of this tax system that’s in force in most European countries.
If you’re a really small trader that mostly sells retail goods then you can remain out of the purview of vat or value added tax as long as your taxable sales do not touch ?70,000 in Twelve months. However, in case your sales touch that figure or let’s say you sell goods to vat registered traders you would be better off being a vat registered trader in the United Kingdom. Vat continues to be employed as a means of collecting taxes on products or services in most of Europe as well as the UK too follows this system. The vat department in the United Kingdom is headed by HM Revenue and Customs or hmrc department.
After you have crossed over the vat threshold limit for uk then you’ll have to apply for vat registration. That can be done even before you reach this limit if you think that you have to reclaim vat which has already been paid on services and goods, especially in a foreign eu country where this method is followed. You ought to hire the services of an experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds to ensure that there are no problems in claiming back vat.
Once you do turn into a vat registered trader in the United Kingdom, which may take up to a month after you file an online vat application then you’ll have to charge vat according to the 14,000 services and goods classifications given by the hmrc vat department. This will likely need to be carried out by each vat invoice you will be needed to issue during each taxable sale. UK has 3 vat rates starting with the regular rate of 17.5%, reduced vat rate of 5%, as well as the zero vat rate. Certain goods and services are totally vat exempt too.
As soon as you are a vat registered trader so as to pay and collect uk vat determined by vat invoices then you will also have to file your vat returns on a regular basis. Again, your vat agent is going to be necessary to calculate vat to be paid or refunded based on your vat purchases and sales. If you have imported goods or services in the UK after paying vat within a eu country then you can avoid double taxation by filing a vat reclaim form. You’ll be awarded vat refund between four to eight months after your claim is successfully processed by hmrc and the member country. Overall, vat is a good tax system to prevent double taxation as well as plug many loopholes which were present in the conventional sales tax system.
If you’re a growing trader in the United Kingdom that sells taxable goods to vat registered traders then you need to keep the cycle of vat alive by getting to be a vat registered trader. Now you can collect and pay uk vat whilst claiming any vat previously paid on imported products or services, which will will reduce your tax overheads to a large extent.