If 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 make an application for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs and also enhance 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 whilst trading between member eu countries. In case you have started a new business vatnumbers in the United Kingdom and also have touched ?70,000 pounds in taxable sales in the past 1 year then you can definitely apply for vat registration with the HM Revenue and Customs or hmrc department. You may also apply before threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be achieved as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you make an application for vat registration your costs could increase slightly, and if you sell your goods and services locally in the United Kingdom at a retail level then you may choose to remain outside vat if 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 this hmrc vat department may not take your actions lightly if you’re discovered doing precisely 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 in another country too.
The entire process for registration for vat is quite simple but if you are not sure about yourself then you definitely should simply appoint a professional vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can apply for vat using 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 typically takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during that period you will have to take into account applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from their end.
As soon as your application is eligible then you will receive your unique vat registration number and will have to display it on all vat documents including 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 the invoice together with your vat no at the very top. You will have to give a summary of all vat paid and collected within your vat returns that will have 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 an official vat registered trader.
Vat registration is a straightforward online procedure that needs to be done first if you wish to turn into a vat registered trader in the UK. You can simply fill up the web based vat registration form and submit it to the hmrc vat department when you make an application for registration for vat.