In case you have crossed the threshold limit or want to become 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 are a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs as well as enhance your business cash flow.
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 in the UK and have touched ?70,000 pounds in taxable sales in the past 1 year then you can apply for vatregistrationnumber.com vat registration with the HM Revenue and Customs or hmrc department. You may also apply before threshold limit is achieved if you sell your goods or services 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, 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 a retail level then you may 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 outside the system of vat then the hmrc vat department may not take your actions lightly if you're discovered doing the same. There are many advantages of entering the vat system since it will avoid the problem of double taxation by allowing you to reclaim vat already paid on services or goods 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 an expert 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 using 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 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 your application so that your clients can reclaim vat from other end.
Once your application is eligible you will receive your distinct vat registration number and will need to display it on all vat documents including 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 very top. You will need to provide 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. If 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 simple online process that needs to be done first if you wish to turn into a vat registered trader in the UK. You can easily fill up the web based vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.