If you’re a trader in the UK with rising taxable sales you will need to pay uk vat to relish all benefits provided by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 during the past Twelve months then you need to get vat registration in order that you too can become part of this tax system that is in force in most European countries.
If you’re a really small trader that mostly sells retail goods you’ll be able to remain from the purview of vat or value added tax as long as your taxable sales do not touch ?70,000 in Twelve months. However, if your sales touch that figure or if you sell goods to vat registered traders then you would be better off being a vat registered trader in the United Kingdom. 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 method. 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 www.vatnumbersearch.com then you’ll need to apply for vat registration. That can be done even before you reach this limit if you think that you need to reclaim vat that has previously been paid on goods and services, especially in a different eu country where this method is followed. You should do the hiring 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.
Once you do turn into a vat registered trader in the UK, which could extend to 30 days once you file an online vat application then you will need to charge vat according to the 14,000 goods and services classifications given by the hmrc vat department. This will likely have to be carried out by each vat invoice that you will be required 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 in order to pay and collect uk vat based on vat invoices then you will also have to file your vat returns on a regular basis. Again, your vat agent will be necessary to calculate vat to be paid or refunded depending on your vat purchases and sales. If you have imported services or goods in the UK after paying vat within a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc as well as the member country. Overall, vat is an excellent tax system to avoid double taxation and also plug many loopholes which were found in the traditional sales tax system.
If you are a growing trader in the UK that sells taxable goods to vat registered traders then you will want to maintain the cycle of vat alive by getting to be a vat registered trader. Now you can collect and pay uk vat whilst claiming any vat previously paid on imported products or services, which will will lower tax overheads to a large extent.