If you’re a vat registered trader in the UK you’ll be able to steer clear of the problem of double taxation on services utilized from foreign companies when you claim reverse charge vat on services where vat was already paid. This vat procedure will allow you to first pay vat and then cancel it so your net cost doesn’t increase.
If you are a trader which uses services of foreign companies, especially those situated in vat-friendly eu countries then you might have already paid vat in those countries. Alternatively, you might also www.vatnumbersearch.com have obtained such services in Britain itself from the supplier located in a eu country. Every one of these factors would turn out boosting your expenses as you could end up paying vat on certain services including those linked to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department along with the European Community simplification regulations.
If you have a lttle bit difficulty in interpreting these vat rules then you should enrol the services of a competent customs and excise customs vat agent with a wide reach in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and could help you to claim reverse charge vat that may have already been paid to a foreign company situated in another country including a vat-friendly eu country.
You can reclaim vat already paid for specified services while filing your vat returns itself. If you are in Britain then you’ll need to calculate and indicate the amount of paid in Box 1 of the vat return form. You will then need to specify exactly the same amount in Box 4 of that return so that the amount stands cancelled. You will also need to specify the full amount of the provision in Box 6 and 7 of the vat return form in order to complete your reverse charge vat claim. However, you will have to convert the currency of any vat paid in the foreign country to sterling before you decide to fill out the amounts in those boxes.
This reverse charge process is also known as tax shift and you may go for such a vat reclaim only when you’re a vat registered trader in Britain. In order to be a vat registered trader, your taxable sales need to go over ?70,000 in the last 1 year while you can even apply before this vat threshold amount has been achieved. Once you start charging vat to the customers and file regular vat returns then any services rendered by you from an overseas company can be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department.
Although following vat rules are not really hard, it is always better to choose services of an proficient vat agent that may handle all your vat requirements seamlessly. This will likely enable you to concentrate on boosting your business while your vat agent files for reverse charge vat and recovers your taxes that have previously been taken care of services rendered by way of a foreign company within or outside the UK.