In case you have crossed the threshold limit or want to be a part of the vat or value added tax system then you’ll 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 and also improve 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 countries. In case you have started a new business in the UK and also have touched ?70,000 pounds in taxable sales in the past 12 months then you can make an application for vatregistrationnumber 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 services or goods to mostly vat registered traders. Vat registration can be achieved as 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 if you sell your goods and services locally in the UK at a retail level then you could choose 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 simply to remain outside the 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 many advantages of entering the vat system since it will prevents the problem of double taxation by permitting you to reclaim vat already paid on services or goods in another country too.
The entire process for registration for vat is pretty simple but if you are not sure about yourself then you should simply appoint a professional 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. As soon as you apply for vat registration then the procedure for approving the application typically 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 take into account applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from other end.
Once your application is eligible you will receive your unique vat registration number and can 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 along with your vat no at the top. You will need to provide a breakdown 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 are a certified vat registered trader.
Vat registration is a straightforward online process that needs to be done first if you wish to turn into a vat registered trader in the United Kingdom. You can easily fill the web based vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.