In case you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you’ll need to apply for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also enhance your business cash flow.
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 whilst trading between member eu countries. In case you have started a new business in the UK and also have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely 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 achieved as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you apply for vat registration 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 opt to remain outside vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities simply to remain away from system of vat then this hmrc vat department might not take your actions lightly in case you are 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 reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is quite simple however, if you are not 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 using your vat agent too provided you inform the department of your choosing. As soon as you make an application for vat registration then the procedure for approving your application typically takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during that period you will have to factor in applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from their end.
As soon as your application is approved you will receive your unique vat registration number and can need 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 that invoice along with your vat no at the top. You will have to give a summary of all vat paid and collected within your vat returns that will have 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 certainly try 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 UK. You can easily fill the web based vat registration form and submit it to your hmrc vat department when you apply for registration for vat.