For selling to to vat registered traders it makes sense to sign up for vat

If you are a trader in the United Kingdom or other EU country which has adopted or vat as a method of collecting taxes then for supplying vat registered traders it seems sensible to register for vat. It will be possible to pass on vat benefits to your customers while also having the ability to reclaim vat that might already have been paid in another country.

In the UK you can register as being a vat registered trader regardless of whether you are an individual operating a business, a partnership, a club, a company, an association, or other vat numbers type of organisation. Basically, if you are dealing in goods or services that attract vat then you can certainly get registered for vat. In addition, if most of your clients are vat registered dealers then it definitely is a good idea for you to continue the vat tax chain and turn a vat registered dealer.

In case your taxable sales go over the vat threshold limit of ?70,000 in the last 12 months then you’re eligible for vat registration. However, you can also volunteer to get registered for vat before crossing the threshold limit too. Vat is an efficient way of taxing goods and services to be able to prevent the problem of double taxation and even create transparency within the tax system. If you are planning to import services or goods into the UK and then sell them locally you’ll be able to also make an application for vat refunds once you become an official vat registered trader. You will need to apply to the HM revenue and customs department or hmrc department, which inturn will forward your refund application to the concerned eu country.

Once you sign up for vat with the hmrc department and turn into an official vat registered dealer then you’ll need to issue a vat invoice that’s been specified by hmrc. You will have to mention your vat number, vat rate and vat amount on 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 have to check with regards to which vat rate applies to each product or service before you begin issuing vat invoices and begin charging the applicable rates.

The vat rules in different eu countries that have adopted vat are slightly different and if you plan to import goods from such countries then you need to know far more than merely what is vat. A professional 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 products and services into the UK. Once you turn into a vat registered dealer then you’ll definitely also need to file vat returns at the hmrc specified periods. If you deal in vat exempted goods then 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 for you. However, before you be a part of the vat cycle you need to first sign up for vat in order that you too can enjoy all tax benefits offered by this tax system.