If you are 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 whenever you claim reverse charge vat on services where vat was already paid. This vat procedure allows you to first pay vat and then cancel it so your net cost does not increase.
If you are a trader that utilizes services of foreign companies, especially those situated in vat-friendly eu countries then you might have already paid vat in those countries. On the other hand, you may also http://vatnumbersearch.com have received such services in the UK itself from a supplier situated in a eu country. All these factors would end up boosting your expenses since you could end up paying vat on certain services including those related to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification regulations.
In case you have a little difficulty in interpreting these vat rules you then should enrol the expertise of a competent customs and excise customs vat agent having a wide reach in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and may help you to claim reverse charge vat that may have already been paid to a foreign company situated in another country together with a vat-friendly eu country.
You are able to reclaim vat already paid for specified services while filing your vat returns itself. If you are in the UK then you’ll need to calculate and indicate how much paid in Box 1 of the vat return form. You will then need to specify the same amount in Box 4 of that return so that the amount stands cancelled. You will also have to specify the full amount of the supply in Box 6 and 7 in 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 in the amounts in those boxes.
This reverse charge process can also be called tax shift and you may go in for this type of vat reclaim only when you’re a vat registered trader in Britain. In order to be a vat registered trader, your taxable sales have to go over ?70,000 in the last 12 months although you can even apply before this vat threshold amount may be achieved. As soon as you start charging vat to your customers and file regular vat returns then any services rendered by you a foreign company can be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.
Although following vat rules are not very difficult, it is always better to choose services of proficient vat agent that can handle all your vat requirements seamlessly. This will likely allow you to concentrate on increasing 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 and out the UK.