If you’re a trader in the United Kingdom or other EU country which has adopted or value added tax to be a way of collecting taxes then for supplying vat registered traders it seems sensible to register for vat. You will be able to give on vat benefits to your customers whilst being able to reclaim vat that may have previously been paid in a foreign country.
In the UK you are able to register as being a vat registered trader irrespective of whether you’re an individual operating a business, a partnership, a club, a company, an association, or other vatnumbers kind of organisation. Basically, if you are dealing in goods or services that attract vat then you can get registered for vat. Additionally, 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 into a vat registered dealer.
In case your taxable sales go over the vat threshold limit of ?70,000 in the last Yr then you are qualified to apply for vat registration. However, you can even volunteer to obtain registered for vat before crossing the threshold limit too. Vat is an excellent method of taxing goods and services to be able to prevent the problem of double taxation as well as create transparency in the tax system. If you’re planning to import services or goods to the UK and then sell them locally then you can also apply for vat refunds once you turn into an official vat registered trader. You will have to apply at the HM revenue and customs department or hmrc department, which inturn will forward your refund application towards the concerned eu country.
Once you register for vat with the hmrc department and turn into an official vat registered dealer then you will have to issue a vat invoice that has been specified by hmrc. You will have to mention your vat number, vat rate and vat amount within the invoice. UK has 3 kinds 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’ll first need to check with regards to which vat rate pertains to each product or service before you start issuing vat invoices and start charging the applicable rates.
The vat rules in several eu countries that have adopted vat are slightly different and if you plan to import goods from such countries then you need to understand much more than merely what is vat. An expert vat agent with sufficient knowledge of customs and excise duties that also knows information about uk vat and eu vat rules should be hired for smooth import of goods and services to the UK. As soon as you turn into a vat registered dealer then you will also need to file vat returns at the hmrc specified periods. In case you deal in vat exempted goods then you will not be able to claim any vat refunds.
The hmrc offers vat registered dealers a chance to file their vat returns online itself. Your agent can also file the return on your behalf. 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 provided by this tax system.