If you have crossed the threshold limit or want to become a part of the vat or value added tax system then you’ll need to apply for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs as well as 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 new business in the UK and also have touched ?70,000 pounds in taxable sales during the past 12 months then you can 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 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 when you sell your products or services locally in the UK at a retail level then you could choose to remain outside of vat should you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities simply to remain outside the system of vat then this hmrc vat department might not take your actions lightly in case you are discovered doing precisely the same. There are many benefits of entering the vat system as it will prevents the problem of double taxation by permitting you to definitely 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 are not sure about yourself then you definitely 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 can make an application for vat through your vat agent too provided you inform the department of your choosing. Once you make an application for vat registration then this process of approving the application typically 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 the application so your clients can reclaim vat from other end.
Once your application is eligible then you will receive your unique vat registration number and may 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 top. You will have to give a summary of all vat paid and collected in your vat returns that will need to be filed periodically as required 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 a certified vat registered trader.
Vat registration is a simple online process that needs to be done first if you want to turn into a vat registered trader in the United Kingdom. You can simply fill the online vat registration form and submit it to your hmrc vat department when you make an application for registration for vat.