In case you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you will need to apply for registration for vat to turn into a vat registered trader. Once you are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also improve your business earnings.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed even while trading between member eu countries. If you have started a new business in the United Kingdom and also have touched ?70,000 pounds in taxable sales in the past vat registration number 12 months then you can 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 services or goods 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, as soon as 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 the retail level then you may choose to remain outside of vat if 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 might not take your actions lightly if you’re discovered doing the same. There are several benefits of entering the vat system since it will avoid the problem of double taxation by permitting you to reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is pretty simple however, if you are not sure about yourself then you should simply appoint an expert 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 using your vat agent too provided you inform the department of your choice. As soon as you make an application for vat registration then the procedure for approving the application usually takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during that period you will need to take into account applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from other end.
Once your application is eligible then you will receive your unique vat registration number and can have to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will also 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 needed by the hmrc vat department. If you have already paid vat on products or services in another eu country then you can try for vat reclaim once you are an official vat registered trader.
Vat registration is a straightforward online procedure that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can simply fill up the online vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.