If you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you will need to make an application for registration for vat to turn into a vat registered trader. When you finally are a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs and also enhance your business cash flow.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed even while trading between member eu http://vatvalidation.com countries. If 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 definitely apply for vat registration with the HM Revenue and Customs or hmrc department. You may also apply before threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be achieved as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you apply for vat registration 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 if you only sell vat exempt goods. However, if you try to artificially try to separate your business activities simply to remain outside the system of vat then this hmrc vat department might not take your actions lightly if you’re discovered doing precisely the same. There are many advantages of entering the vat system since it will prevents the problem of double taxation by allowing you to definitely reclaim vat already paid on services or goods overseas too.
The entire 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 handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can apply for vat through your vat agent too provided you inform the department of your choosing. Once you make an application for vat registration then the procedure for approving the application usually takes between 10 to 30 days. Fo the time being you can continue issuing regular invoices to your clients. However, during that period you will need to factor in applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from other end.
As soon as your application is eligible you will receive your unique vat registration number and may need 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 the invoice together with your vat no at the top. You will have to provide a breakdown of all vat paid and collected within your vat returns that will need to be filed periodically as required by the hmrc vat department. If you have already paid vat on products or services in another eu country then you can certainly apply for vat reclaim once you’re an official 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 easily fill up the web based vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.