If you are a vat registered trader in Britain you’ll be able to steer clear of the problem of double taxation on services utilized from foreign companies when you claim reverse charge vat on services where vat was already paid. This vat procedure will allow you to first pay vat and after that cancel it out so that your net cost does not increase.
If you’re a trader which uses services of foreign companies, especially those located in vat-friendly eu countries then you may have already paid vat in those countries. On the other hand, you may also www.vatnumbersearch.com have received such services in Britain itself from a supplier located in a eu country. All these factors would end up increasing your expenses as you could end up paying vat on certain services including those related to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department along with the European Community simplification regulations.
If you have a lttle bit difficulty in interpreting these vat rules you then should enrol the services of a good customs and excise customs vat agent with a wide reach in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and could help you to claim reverse charge vat that might have been paid to a foreign company located in another country together with a vat-friendly eu country.
You are able to reclaim vat already covered specified services while filing your vat returns itself. If you’re in Britain then you’ll have to calculate and indicate how much paid in Box 1 of the vat return form. You will then need to specify exactly the same amount in Box 4 of the return so that the amount stands cancelled. You’ll need to specify the total amount of the provision in Box 6 and 7 in the vat return form in order to complete your reverse charge vat claim. However, you will have to convert the currency of the vat paid in the foreign country to sterling before you fill in the amounts in those boxes.
This reverse charge process can also be called tax shift and you may go for such a vat reclaim only if you’re a vat registered trader in the UK. In order to be a vat registered trader, your taxable sales need to go over ?70,000 in the last 12 months while you can even apply before vat threshold amount may be achieved. Once you start charging vat to your customers and file regular vat returns then any services rendered by you a foreign company can be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department.
Although following vat rules usually are not really hard, it is always preferable to opt for the services of a proficient vat agent that can handle all your vat requirements seamlessly. This will enable you to concentrate on boosting your business while your vat agent files for reverse charge vat and recovers your taxes which may have already been taken care of services rendered by way of a foreign company within or outside the UK.