If you have crossed the threshold limit or want to be a part of the vat or value added tax system then you will need to make an application 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 lower your costs as well as enhance your business cash flow.
Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed whilst trading between member eu countries. If you have started a new business in the United Kingdom and have touched ?70,000 pounds in taxable sales in the past 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 achieved as being 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 if you sell your products or services locally in the UK at a retail level then you could choose to remain outside of vat if you only sell vat exempt goods. However, if you try to artificially try 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 benefits of entering the vat system since it will prevents 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 but if you aren’t sure about yourself then you 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 through your vat agent too provided you inform the department of your choosing. As soon as you make an application for vat registration then this procedure for approving your application usually takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, during that period you will need to factor in applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from other end.
Once your application is approved then 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 also have to issue a vat invoice that separately shows all vat rates applied in that invoice along 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 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’re a certified vat registered trader.
Vat registration is a straightforward online procedure that needs to be done first if you wish to turn into a vat registered trader in the UK. You can easily fill the online vat registration form and submit it to the hmrc vat department whenever you make an application for registration for vat.