In case 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 make an application for registration for vat to turn into a vat registered trader. When you finally are a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby decrease your costs as well as improve your business earnings.
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. If you have started a fresh business vatnumbers.com in the UK and have touched ?70,000 pounds in taxable sales in the past 1 year then you can definitely apply for vat registration with the HM Revenue and Customs or hmrc department. You may also apply before this threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be done as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you apply for vat registration then your costs could increase slightly, and if you sell your goods and services locally in the United Kingdom at a retail level then you could choose to remain outside vat should you only sell vat exempt goods. However, if you try to artificially try to separate your business activities only 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 permitting you to definitely reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is quite simple but if you aren’t 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 are able to apply for vat through your vat agent too provided you inform the department of your choice. As soon as you apply for vat registration then this process of approving your application typically takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, in that period you will need to factor in applicable vat rates and re-issue those invoices issued after the application so your clients can reclaim vat from their end.
Once your application is approved you will receive your unique vat registration number and may have 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 top. You will have to provide 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 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 UK. You can easily fill up the web based vat registration form and submit it to your hmrc vat department when you apply for registration for vat.