In case 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 earnings.
Several eu countries including 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 countries. If you have started a fresh business in the United Kingdom and have touched ?70,000 pounds in taxable sales in the past 12 months then you can apply for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before this 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, as soon as you make an application for vat registration then your costs could increase slightly, and if you sell your products or services locally in the UK at the retail level then you could choose to remain outside vat if you only sell vat exempt goods. However, if you try to artificially make an effort to separate your enterprise activities simply to remain away from system of vat then the hmrc vat department might not take your actions lightly in case you are discovered doing precisely the same. There are several benefits of entering the vat system since it will prevents the problem of double taxation by allowing you to reclaim vat already paid on goods or services overseas too.
The entire process for registration for vat is quite simple however, if you aren’t sure about yourself then you definitely 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 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 this 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 need to factor in applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from other end.
Once your application is approved then you will receive your distinct 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 need to issue a vat invoice that separately shows all vat rates applied in the invoice together 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 needed by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can certainly apply for vat reclaim once you are an official 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 UK. You can easily fill up the online vat registration form and submit it to your hmrc vat department when you apply for registration for vat.