If you are a trader in the United Kingdom or other EU country that has adopted or vat to be a way of collecting taxes then for supplying vat registered traders it seems sensible to sign up for vat. You will be able to pass on vat benefits to your customers whilst being able to reclaim vat that may already have been paid in another country.
In the UK you are able to register as being a vat registered trader regardless of whether you’re an individual operating a business, a partnership, a club, an organization, an association, or any other http://vatnumbers.com kind of organisation. Basically, for anyone who is dealing in services or goods that attract vat then you can get registered for vat. In addition, if your main customers are vat registered dealers then it definitely is a good idea that you continue the vat tax chain and turn into a vat registered dealer.
In case your taxable sales cross over the vat threshold limit of ?70,000 in the previous 12 months then you’re entitled to vat registration. However, you can also volunteer to get registered for vat before crossing the threshold limit too. Vat is an efficient method of taxing products or services so as to prevent the problem of double taxation and even create transparency within the tax system. If you are planning to import services or goods to the UK and then sell them locally then you can also make an application for vat refunds as soon as you become the official vat registered trader. You will need to apply at the HM revenue and customs department or hmrc department, which in turn will forward your refund application towards the concerned eu country.
Once you register for vat with the hmrc department and turn into an official vat registered dealer then you’ll have to issue a vat invoice that has been specified by hmrc. You will need to mention your vat number, vat rate and vat amount within the invoice. UK has 3 types of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some products or services with a social impact are usually vat exempt. You will first need to check with regards to which vat rate applies to each product or service before you start issuing vat invoices and begin charging the applicable rates.
The vat rules in different eu countries which have adopted vat are slightly different and if you plan to import goods from such countries then you need to understand far more than merely what is vat. An expert vat agent with plenty of knowledge of customs and excise duties which also knows information about uk vat and eu vat rules ought to be hired for smooth import of goods and services into the UK. As soon as you turn into a vat registered dealer then you will also need to file vat returns at the hmrc specified periods. If you deal in vat exempted goods you will not be able to claim any vat refunds.
The hmrc offers vat registered dealers an opportunity to file their vat returns online itself. Your agent can also file the return on your behalf. However, before you decide to be a part of the vat cycle you need to first sign up for vat in order that you can also enjoy all tax benefits offered by this tax system.