If you have crossed the threshold limit or want to be a part of the vat or value added tax system then you'll need to make an application for registration for vat to turn into a vat registered trader. Once you are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also improve your business earnings.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed even while trading between member eu countries. If you have started a fresh business http://vatnumbers.com in the United Kingdom and have touched ?70,000 pounds in taxable sales in the past 12 months 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 achieved as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you make an application for vat registration your costs could increase slightly, and when you sell your products or services locally in the United Kingdom at the retail level then you could choose to remain outside of vat if you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities only to remain outside the system of vat then this hmrc vat department may not take your actions lightly in case you are discovered doing precisely the same. There are many advantages of entering the vat system since it will prevents the problem of double taxation by permitting you to reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is quite simple but if you are not sure about yourself then you should simply appoint a professional vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You are able to make an application for vat through your vat agent too provided you inform the department of your choice. As soon as you make an application for vat registration then the process of approving the 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 your application so your clients can reclaim vat from their end.
Once your application is eligible you will receive your distinct 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 have to issue a vat invoice that separately shows all vat rates applied in the invoice together with your vat no at the top. You will have 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 goods and services in another eu country then you can try for vat reclaim once you're a certified vat registered trader.
Vat registration is a straightforward online procedure that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can simply fill up the web based vat registration form and submit it to your hmrc vat department when you make an application for registration for vat.