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. Once you turn into 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 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 http://vatvalidation.com 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 1 year then you can make an application for 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 achieved as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you apply for vat registration then 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 opt 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 only to remain away from system of vat then this hmrc vat department might not take your actions lightly if you're discovered doing the same. There are many benefits 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 however, if you aren't 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 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 this 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 need to take into account applicable vat rates and re-issue those invoices issued after the application so your clients can reclaim vat from other end.
Once your application is approved then you will receive your unique vat registration number and may need to display it on all vat documents including 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 need to provide a summary of all vat paid and collected in your vat returns that will need to be filed periodically as needed by the hmrc vat department. In case you have already paid vat on goods and services in another eu country then you can certainly try for vat reclaim once you're an official vat registered trader.
Vat registration is a simple online procedure that has 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 make an application for registration for vat.