If you have crossed the threshold limit or wish to be a part of the vat or value added tax system then you will need to apply for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also improve your business cash flow.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed whilst trading between member eu www.vatvalidation.com countries. In case you have started a new business in the UK and also have touched ?70,000 pounds in taxable sales in the past 12 months then you can 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 goods or services 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, once you make an application for vat registration your costs could increase slightly, and if you sell your goods and services locally in the UK at the retail level then you may opt to remain outside vat should you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities only to remain away from system of vat then the hmrc vat department might not take your actions lightly in case you are discovered doing precisely the same. There are many benefits of entering the vat system as it will avoid the problem of double taxation by allowing you to definitely reclaim vat already paid on goods or services overseas too.
The whole process for registration for vat is pretty simple but if you are not 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 choice. As soon as you make an application for vat registration then the procedure for approving the application typically 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 your application so that your clients can reclaim vat from other end.
As soon as your application is approved you will receive your unique vat registration number and can have to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will also have 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 need to give a breakdown of all vat paid and collected in your vat returns which will have to be filed periodically as needed by the hmrc vat department. In case you have already paid vat on products or services in another eu country then you can certainly try for vat reclaim once you are a certified vat registered trader.
Vat registration is a straightforward online process that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can simply fill up the online vat registration form and submit it to your hmrc vat department whenever you make an application for registration for vat.