If you’re a trader in Britain with rising sales or wish to voluntarily enter the VAT tax system then you need uk vat registration if you wish to charge or reclaim vat. As soon as you are a uk vat registered trader then you can start charging vat or value added tax to your clients and even reclaim previously paid vat on goods and services, even when paid in another eu country.
Much like most other countries inside the European Union such as Greece, Spain, Poland, Sweden, Germany, Italy, etc, Britain too embraced the system of vat as a means of taxing services and goods. If your business is vatregistrationnumber quite small , your end-clients are people who don’t need vat invoices you would then be better off by remaining outside the scope of vat because this will lower your costs. However, once your taxable sales cross ?70,000 in the earlier Yr then you will have to sign up for vat unless you deal only in vat exempt goods or services.
On the other hand, in case your clients want you to charge vat to them to enable them to offset it against their sales then you can make an application for vat registration even before the vat threshold limit has been achieved. You are able to make an application for uk vat registration as being an individual, partnership, company, club, association, charity, etc dependant upon the nature of the business. You will have to apply online for registration to the HM Revenue and Customs department or hmrc department provided you meet all criteria posed by them.
If you import taxable goods from other eu and non-eu countries to sell them locally, re-export services or goods outside the UK, as well as buy goods locally to resell them, then you’ll need to get vat registered in Britain, especially if you have crossed over the vat threshold limit. You can make an application for online vat application only when you utilize VAT 1 form, which happens to be for small businesses run by individuals. All other registration forms is available but will need to be filled manually before being dispatched to the hmrc vat department for processing. You need to get your vat number within 1 month of applying, provided all your documents are typically in order.
You will now be in a position to issue a vat invoice against each sale and will also have to specify vat rates against each goods and services. Additionally, you will need to file vat returns as decided by the hmrc department. However, if you have already paid vat on services and goods, even if they were paid in another eu country then you will now be able to apply for vat refund and receive that amount back into your account. This feature will help improve your business cash-flow whilst lowering your product or services costs. Should you have difficulty in understanding uk vat and eu vat rules then a professional vat agent may help solve all your problems related to vat returns and vat refunds so that your business keeps on growing without any taxation hiccups.
In case your business is poised to sneak over the vat threshold limit of ?70,000 in taxable sales then you will have to turn over a vat registered trader. However, this is a relocation in the correct direction since once you complete your uk vat registration process and turn into a vat registered trader you will then be in a position to claim for vat refunds and infuse that money in your business.