If you're a trader in the UK or any other EU country which has adopted or value added tax as a method of collecting taxes then for supplying vat registered traders it makes sense to register for vat. It will be possible to pass on vat benefits to your customers whilst being able to reclaim vat that may have previously been paid in a foreign country.
In the United Kingdom you are able to register as being a vat registered trader regardless of whether you are an individual running a business, a partnership, a club, a company, an association, or any other www.vatnumbers.com type of organisation. Basically, if you are dealing in services or goods that attract vat then you can get registered for vat. In addition, if your main customers are vat registered dealers it definitely is a good idea for you to continue the vat tax chain and turn into a vat registered dealer.
If your taxable sales go over the vat threshold limit of ?70,000 in the last Yr then you're eligible for vat registration. However, you can even volunteer to obtain registered for vat before crossing the threshold limit too. Vat is an efficient way of taxing goods and services so as to prevent the problem of double taxation as well as create transparency in the tax system. If you're planning to import goods or services to the UK and then sell them locally you'll be able to also make an application for vat refunds as soon as you turn into an official vat registered trader. You will need to apply at the HM revenue and customs department or the hmrc department, which inturn will forward your refund application towards the concerned eu country.
As soon as you register for vat with the hmrc department and turn into an official vat registered dealer then you'll have to issue a vat invoice that has been specified by hmrc. You will need to mention your vat number, vat rate and vat amount on the invoice. UK has 3 kinds of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some products or services with a social impact are also vat exempt. You will first need to check as to which vat rate applies to each product or service before you begin issuing vat invoices and start charging the applicable rates.
The vat rules in several eu countries which have adopted vat are slightly different and if you intend to import goods from such countries then you need to know far more than merely what exactly is vat. A professional vat agent with sufficient understanding of customs and excise duties which also knows all about uk vat and eu vat rules should be hired for smooth import of goods and services into the UK. As soon as you turn into a vat registered dealer then you will also need to file vat returns at the hmrc specified periods. In case you deal in vat exempted goods then you will be unable to claim any vat refunds.
The hmrc offers vat registered dealers an opportunity to file their vat returns online itself. Your agent may also file the return for you. However, before you become a part of the vat cycle you need to first sign up for vat so that you too can enjoy all tax benefits provided by this tax system.