If you have crossed the threshold limit or wish 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 decrease your costs and also enhance your business earnings.
Several eu countries including 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 fresh business in the UK and also have touched ?70,000 pounds in taxable sales in 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 threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be done 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 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 choose to remain outside of 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 outside the system of vat then the hmrc vat department may not take your actions lightly if you're discovered doing precisely the same. There are several benefits of entering the vat system as it will avoid the problem of double taxation by allowing you to definitely reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is pretty 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 choice. Once you make an application for vat registration then the procedure for approving your application usually 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 that your clients can reclaim vat from other end.
Once your application is eligible you will receive your distinct vat registration number and will 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 that 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 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 try for vat reclaim once you're a certified vat registered trader.
Vat registration is a simple online procedure that needs to be done first if you wish to turn into a vat registered trader in the United Kingdom. You can easily fill up the web based vat registration form and submit it to your hmrc vat department when you apply for registration for vat.