In case you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you’ll need to apply for registration for vat to turn into a vat registered trader. When you finally are a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs as well as improve your business earnings.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed even while trading between member eu countries. In case you have started a fresh business in the United Kingdom and also have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely make an application for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be achieved as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you apply for vat registration your costs could increase slightly, and when you sell your goods and services locally in the UK at the retail level then you may choose to remain outside of vat should you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities only to remain outside the system of vat then the hmrc vat department might not take your actions lightly if you’re discovered doing the same. There are several advantages of entering the vat system as it will avoid the problem of double taxation by permitting you to reclaim vat already paid on goods or services in another country too.
The whole process for registration for vat is quite simple but if you aren’t sure about yourself then you 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 through your vat agent too provided you inform the department of your choosing. Once you make an application for vat registration then the procedure for approving your application usually takes between 10 to 30 days. Fo the time being you can keep issuing regular invoices to your clients. However, during that period you will need to take into account applicable vat rates and re-issue those invoices issued after the application so your clients can reclaim vat from their end.
Once your application is eligible then you will receive your unique vat registration number and will need to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will probably have to issue a vat invoice that separately shows all vat rates applied in that invoice along with your vat no at the top. You will have to give a summary of all vat paid and collected within your vat returns that will need to be filed periodically as required by the hmrc vat department. In case 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 process that needs to be done first if you wish to turn into a vat registered trader in the United Kingdom. You can easily fill the web based vat registration form and submit it to your hmrc vat department whenever you apply for registration for vat.