If you have crossed the threshold limit or wish 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 and also enhance your business cash flow.
Several eu countries including 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. If you have started a new business in the UK and have touched ?70,000 pounds in taxable sales during the past 12 months then you can make an application for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be achieved as being 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 if you sell your products or services locally in the United Kingdom at the retail level then you may choose to remain outside of vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your enterprise activities simply 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 many benefits of entering the vat system as it will prevents the problem of double taxation by allowing you to reclaim vat already paid on goods or services in another country too.
The entire process for registration for vat is quite simple however, if you are not 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 can apply 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 this procedure for approving your application usually takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during that period you will need to take into account applicable vat rates and re-issue those invoices issued after your application so 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 have to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will probably have to issue a vat invoice that separately shows all vat rates applied in that invoice together with your vat no at the top. You will need to give a summary of all vat paid and collected within your vat returns which will need to be filed periodically as required by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can try for vat reclaim once you’re a certified 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 United Kingdom. You can simply fill the web based vat registration form and submit it to your hmrc vat department when you make an application for registration for vat.