If you are a trader in the UK with rising taxable sales then you need to pay uk vat to relish all benefits offered by this taxation system. Once your taxable sales touch the vat threshold limit of ?70,000 during the past Twelve months then you need to apply for vat registration so that you too can end up part of this tax system that is in force in most European countries.
If you’re a really small trader that mostly sells retail goods you’ll be able to remain out of the purview of vat or value added tax so long as your taxable sales do not touch ?70,000 in 12 months. However, if your sales touch that figure or let’s say you sell goods to vat registered traders you would be better off as a vat registered trader in the United Kingdom. Vat has been employed as a way of collecting taxes on products or services in the majority of of Europe as well as the UK too follows this method. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.
Once you have crossed over the vat threshold limit for uk www.vatnumbersearch.com then you’ll need to apply for vat registration. You can do so before you reach this limit if you feel that you have to reclaim vat that has previously been paid on services and goods, specifically in a foreign eu country where this system is followed. You ought to do the hiring of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds so that there are no problems in claiming back vat.
Once you do turn into a vat registered trader in the United Kingdom, which could extend to 30 days once you file a web-based vat application then you will need to charge vat as per the 14,000 goods and services classifications given by the hmrc vat department. This will need to be done through each vat invoice that you will be required to issue during each taxable sale. UK has 3 vat rates beginning with the regular rate of 17.5%, reduced vat rate of 5%, and the zero vat rate. Certain goods and services are totally vat exempt too.
As soon as you are a vat registered trader in order to pay and collect uk vat determined by vat invoices then you’ll also have to file your vat returns regularly. Again, your vat agent is going to be required to calculate vat to get paid or refunded depending on your vat purchases and sales. In case you have imported goods or services in the UK after paying vat within a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You’ll be awarded vat refund between four to eight months after your claim is successfully processed by hmrc as well as the member country. Overall, vat is an excellent tax system to prevent double taxation as well as plug many loopholes that were present in the traditional sales tax system.
If you’re a growing trader in the United Kingdom that sells taxable goods to vat registered traders then you will want to maintain the cycle of vat alive by getting to be a vat registered trader. You can now collect and pay uk vat whilst claiming any vat previously paid on imported goods and services, which will will reduce your tax overheads to a large extent.