If you’re a trader in the UK with rising taxable sales you will need to pay uk vat to enjoy all benefits provided by this taxation system. Once your taxable sales touch the vat threshold limit of ?70,000 during the past 12 months then you’ll need to get vat registration so that you too can become part of this tax system that is in effect in most Europe.
If you are a very small trader that mostly sells retail goods then you can remain from the purview of vat or value added tax so long as your taxable sales do not touch ?70,000 in Twelve months. However, in case your sales touch that figure or if you sell goods to vat registered traders then you would be better off as a vat registered trader in the UK. Vat has been employed as a means of collecting taxes on products or services in the majority of of Europe as well as the UK too follows this system. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.
After you have crossed over the vat threshold limit for uk vatcontrol.com then you’ll have to apply for vat registration. That can be done even before you reach this limit if you think that you need to reclaim vat which has previously been paid on services and goods, especially in a foreign eu country where this system is followed. You ought to hire the services of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes and for filing of vat refunds so that there are no problems in claiming back vat.
As soon as you do turn into a vat registered trader in the UK, which may take up to 30 days once you file an online vat application then you will need to charge vat according to the 14,000 services and goods classifications provided by the hmrc vat department. This will have to be carried out by each vat invoice you will be needed to issue during each taxable sale. UK has 3 vat rates starting with the regular rate of 17.5%, reduced vat rate of 5%, as well as the zero vat rate. Certain services and goods are totally vat exempt too.
Once you are a vat registered trader so as to pay and collect uk vat based on vat invoices then you’ll also have to file your vat returns regularly. Again, your vat agent is going to be necessary to calculate vat to get paid or refunded based on your vat purchases and sales. If you have imported goods or services in the United Kingdom after paying vat in a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You’ll be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc and the member country. Overall, vat is an excellent tax system to prevent double taxation and also plug many loopholes that were present in the traditional sales tax system.
If you’re a growing trader in the United Kingdom that sells taxable goods to vat registered traders then you will want to keep the cycle of vat alive by turning into a vat registered trader. You can now collect and pay uk vat whilst claiming any vat previously paid on imported products or services, which will will reduce your tax overheads to some large extent.