In case you have crossed the threshold limit or wish to be a part of the vat or value added tax system then you’ll need to make an application for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease 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 vatvalidation countries. In case you have started a fresh business in the UK and have touched ?70,000 pounds in taxable sales during the past 12 months then you can make an application for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before this threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be done as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you make an application for vat registration your costs could increase slightly, and when you sell your products or services locally in the UK at the retail level then you may choose to remain outside vat if you only sell vat exempt goods. However, if you try to artificially make an effort to separate your enterprise activities simply to remain away from system of vat then this hmrc vat department may not take your actions lightly if you’re discovered doing the same. There are several benefits of entering the vat system as it will prevents the problem of double taxation by allowing you to reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is quite simple however, if you are not sure about yourself then you definitely should simply appoint an expert vat agent to deal with all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can make an application for vat using your vat agent too provided you inform the department of your choice. As soon as you apply for vat registration then the procedure for approving your application typically takes between 10 to 30 days. Fo the time being you can keep issuing regular invoices to your clients. However, in that period you will have to factor in applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from their end.
Once your application is approved you will receive your unique vat registration number and will need to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will probably need to issue a vat invoice that separately shows all vat rates applied in the invoice together with your vat no at the very top. You will have to provide a summary of all vat paid and collected within your vat returns that will have to be filed periodically as needed by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can certainly try for vat reclaim once you’re a certified vat registered trader.
Vat registration is a simple online procedure that has to be done first if you wish to turn into a vat registered trader in the United Kingdom. You can easily fill up the online vat registration form and submit it to the hmrc vat department when you make an application for registration for vat.