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. When you finally are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby lower your costs and also enhance 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 UK and have touched ?70,000 pounds in taxable sales during the past 1 year then you can definitely make an application 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 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 make an application for vat registration then your costs could increase slightly, and when you sell your products or services locally in the United Kingdom at the retail level then you may opt to remain outside vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your enterprise activities simply to remain away from system of vat then this hmrc vat department may not take your actions lightly if you’re discovered doing precisely the same. There are many advantages of entering the vat system as it will avoid the problem of double taxation by allowing you to definitely reclaim vat already paid on services or goods in another country too.
The entire process for registration for vat is quite simple however, 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 can make an application for vat using your vat agent too provided you inform the department of your choosing. As soon as you make an application for vat registration then this process of approving the application usually 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 your clients can reclaim vat from their end.
Once your application is eligible 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 the invoice along with your vat no at the very top. You will need to give a summary of all vat paid and collected in your vat returns which will need 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 an official vat registered trader.
Vat registration is a straightforward online procedure that needs 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 your hmrc vat department whenever you apply for registration for vat.