Pay uk vat to enjoy all benefits offered by this taxation system

If you’re a trader in the United Kingdom with rising taxable sales you will need to pay uk vat to relish all benefits provided by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 during the past 12 months then you need to apply for vat registration in order that you can also end up part of this tax system that’s in effect in the majority of European countries.

If you are a really small trader that mostly sells retail goods then you can remain from the purview of vat or value added tax as long as your taxable sales don’t touch ?70,000 in 12 months. However, in case your sales touch that figure or if you sell goods to vat registered traders then you would be better off as a vat registered trader in the United Kingdom. Vat has been employed as a way of collecting taxes on goods and services in most of Europe as well as the UK too follows this method. The vat department in the United Kingdom is headed by HM Revenue and Customs or hmrc department.

Once you have crossed over the vat threshold limit for uk vatcontrol then you’ll have to apply for vat registration. That can be done even before you reach this limit if you feel that you have to reclaim vat which has previously been paid on goods and services, specifically in a different eu country where this method is followed. You ought to hire the services of an experienced vat agent well conversed in uk and eu vat rules for vat registration purposes and for filing of vat refunds so that there aren’t any problems in claiming back vat.

As soon as you do turn into a vat registered trader in the UK, which could take up to a month once you file an online vat application then you’ll need to charge vat according to the 14,000 services and goods classifications provided by the hmrc vat department. This will likely have to be carried out by each vat invoice that you will be required to issue during each taxable sale. UK has 3 vat rates beginning with the standard rate of 17.5%, reduced vat rate of 5%, and the zero vat rate. Certain services and goods are totally vat exempt too.

As soon as you are a vat registered trader in order to pay and collect uk vat based on vat invoices then you will also have to file your vat returns on a regular basis. Again, your vat agent is going to be required to calculate vat to get paid or refunded based on your vat purchases and sales. In case you have imported goods or services in the United Kingdom after paying vat in a eu country then you can avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between four to eight months after your claim is successfully processed by hmrc and the member country. Overall, vat is a good tax system to avoid double taxation and also plug many loopholes which were present in the conventional sales tax system.

If you’re a growing trader in the UK that sells taxable goods to vat registered traders then you will want to maintain the cycle of vat alive by turning into a vat registered trader. You can now collect and pay uk vat whilst claiming any vat previously paid on imported goods and services, which in turn will lower tax overheads to a large extent.