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 apply for registration for vat to turn into a vat registered trader. When you finally turn into a vat registered trader then you will 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 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. If you have started a new business in the UK and have touched ?70,000 pounds in taxable sales during the past 12 months then you can make an application 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 an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you apply 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 opt to remain outside vat should 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 this 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 prevents the problem of double taxation by allowing you to definitely reclaim vat already paid on goods or services overseas too.
The whole process for registration for vat is quite simple however, if you are not sure about yourself then you should simply appoint an expert 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 apply 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 keep issuing regular invoices to your clients. However, during that period you will have to take into account applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from other end.
As soon as your application is approved then you will receive your unique vat registration number and can have to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will probably need to issue a vat invoice that separately shows all vat rates applied in the invoice along with your vat no at the very top. You will have to provide a breakdown of all vat paid and collected within your vat returns which will need to be filed periodically as needed by the hmrc vat department. In case 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 straightforward online procedure that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill up the online vat registration form and submit it to your hmrc vat department whenever you apply for registration for vat.