If you have crossed the threshold limit or want 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 are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs as well as improve your business cash flow.
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 whilst trading between member eu countries. If you have started a new business in the United Kingdom and have touched ?70,000 pounds in taxable sales during the past vatregistrationnumber.com 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 this threshold limit is achieved if you sell your services or goods 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, as soon as you make an application for vat registration then your costs could increase slightly, and if you sell your goods and 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 make an effort to separate your business activities simply to remain outside the system of vat then this hmrc vat department may not take your actions lightly if you’re 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 quite simple however, if you are not sure about yourself then you definitely should simply appoint a professional 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 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 process of approving your application typically takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, in that period you will have to factor in applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from their end.
Once your application is eligible you will receive your distinct 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 have 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 breakdown of all vat paid and collected within your vat returns which 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 apply 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 the online vat registration form and submit it to the hmrc vat department when you make an application for registration for vat.