In case you have crossed the threshold limit or want 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. Once you turn into a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby decrease your costs as well as improve your business earnings.
Several eu countries including 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 countries. If you have started a new business in the United Kingdom and also have touched ?70,000 pounds in taxable sales in the past vatregistrationnumber.com 1 year then you can apply 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 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 if you sell your products or services locally in the United Kingdom at the retail level then you could choose to remain outside vat should you only sell vat exempt goods. However, if you try to artificially try to separate your business activities simply to remain away from system of vat then the hmrc vat department might 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 permitting you to reclaim vat already paid on services or goods 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 handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You are able to apply for vat through your vat agent too provided you inform the department of your choosing. Once you make an application for vat registration then this procedure for approving your application typically takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during that period you will need to factor in 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 may 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 that invoice along with your vat no at the very top. You will have to provide a summary of all vat paid and collected in 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 products or services in another eu country then you can certainly apply for vat reclaim once you’re a certified vat registered trader.
Vat registration is a straightforward online procedure that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill the online vat registration form and submit it to the hmrc vat department when you make an application for registration for vat.