If you’re a trader in the UK with rising sales or wish to voluntarily enter into the VAT tax system then you need uk vat registration if you want to charge or reclaim vat. As soon as you are a uk vat registered trader you’ll be able to start charging vat or value added tax to the clients and also reclaim previously paid vat on goods and services, even when paid in another eu country.
Just like most other countries in the European Union like Greece, Spain, Poland, Sweden, Germany, Italy, etc, Britain too embraced the system of vat as a means of taxing goods and services. In case your business is vat registration number quite small , your end-clients are individuals that do not need vat invoices then you would be better off by remaining outside of the scope of vat because this will reduce your costs. However, once your taxable sales cross ?70,000 in the previous 12 months then you’ll have to sign up for vat unless you deal only in vat exempt goods or services.
On the other hand, if your clients would like you to charge vat to them to enable them to offset it against their sales then you can apply for vat registration even before the vat threshold limit has been achieved. You are able to make an application for uk vat registration as being an individual, partnership, company, club, association, charity, etc depending on the nature of your business. You will need to apply online for registration to the HM Revenue and Customs department or hmrc department provided you meet all criteria posed by them.
In case you import taxable goods from other eu and non-eu countries to market them locally, re-export services or goods outside the UK, as well as buy goods locally to resell them, then you will have to get vat registered in the UK, especially if you have crossed across the vat threshold limit. You are able to make an application for online vat application only when you utilize VAT 1 form, which is for small enterprises run by individuals. All other registration forms is available but will need to be filled manually before being dispatched to the hmrc vat department for processing. You need to get your vat number within 1 month of applying, provided all of your documents are in order.
You will now be able to issue a vat invoice against each sale and also will need to specify vat rates against each goods and services. Additionally, you will have to file vat returns as decided by the hmrc department. However, in case you have already paid vat on goods and services, even when these were paid in another eu country you will now be in a position to file for vat refund and receive that amount back into your account. This feature might help improve your business cash-flow whilst reducing your product or services costs. Should you have difficulty in understanding uk vat and eu vat rules then an expert vat agent may help solve all of your problems associated with vat returns and vat refunds so that your business keeps on growing without taxation hiccups.
If your business is poised to sneak over the vat threshold limit of ?70,000 in taxable sales then you will need to turn over a vat registered trader. However, it is a relocation in the correct direction since once you complete your uk vat registration process and turn a vat registered trader then you will be in a position to claim for vat refunds and infuse those funds in your business.