If you have crossed the threshold limit or want to be 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. Once you turn into a vat registered trader then you will 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 including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed even while trading between member eu countries. In case you have started a fresh business vatnumbers.com in the UK and also have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely apply 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 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 apply 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 opt to remain outside of 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 in case you are discovered doing the same. There are many advantages of entering the vat system since it will prevents the problem of double taxation by allowing you to definitely reclaim vat already paid on goods or services in another country too.
The entire process for registration for vat is pretty 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 are able to apply for vat using your vat agent too provided you inform the department of your choosing. As soon as you apply for vat registration then the procedure for approving your application typically takes between 10 to 30 days. Fo the time being you can continue issuing regular invoices to your clients. However, in that period you will have to take into account applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from other end.
As soon as your application is approved then you will receive your distinct vat registration number and will have to display it on all vat documents as well as 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 that invoice together with your vat no at the very top. You will need to give a breakdown 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 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 simple online procedure that needs to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill the web based vat registration form and submit it to the hmrc vat department whenever you make an application for registration for vat.