If you are a vat registered trader in the UK you'll be able to avoid the problem of double taxation on services utilized from foreign companies when you claim reverse charge vat on services where vat has already been paid. This vat procedure will allow you to first pay vat and after that cancel it out so that your net cost doesn't increase.
If you are a trader which uses services of foreign companies, particularly those situated in vat-friendly eu countries then you certainly may have already paid vat in those countries. Alternatively, you might also vatnumbersearch have received such services in Britain itself from a supplier situated in a eu country. Every one of these factors would end up increasing your expenses as you could end up paying vat on certain services including those linked to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification regulations.
If you have a lttle bit difficulty in interpreting these vat rules you then should enrol the services of a competent customs and excise customs vat agent with a wide reach in most eu countries that practise vat. This kind of agent would surely understand all uk vat and eu vat regulations and may help you to claim reverse charge vat that may have already been paid to a foreign company located in another country including a vat-friendly eu country.
You can reclaim vat already covered specified services while filing your vat returns itself. If you're in Britain then you will have to calculate and indicate how much paid in Box 1 of your vat return form. You'll then have to specify the same amount in Box 4 of the return so that the amount stands cancelled. You'll need to specify the full amount of the provision in Box 6 and 7 of the vat return form so as to complete your reverse charge vat claim. However, you will need to convert the currency of the vat paid in a foreign country to sterling before you decide to fill in the amounts in those boxes.
This reverse charge process is also known as tax shift and you may go for such a vat reclaim only when you're a vat registered trader in Britain. In order to be a vat registered trader, your taxable sales have to go over ?70,000 in the previous 1 year although you may even apply before vat threshold amount may be achieved. Once you start charging vat to the customers and file regular vat returns then any services rendered by you from an overseas company can be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department.
Although following vat rules are not really hard, it is usually better to opt for the services of a proficient vat agent that can handle all of your vat requirements seamlessly. This will enable you to concentrate on increasing your business while your vat agent files for reverse charge vat and recovers your taxes that have previously been paid for services rendered by a foreign company within and out the UK.