If you are a trader in the United Kingdom with rising taxable sales you will need to pay uk vat to enjoy all benefits provided by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 in the past 12 months then you’ll need to apply for vat registration in order that you can also end up part of this tax system that’s in effect in the majority of European countries.
If you are a really small trader that mostly sells retail goods you’ll be able to remain out of the purview of vat or value added tax as long as your taxable sales do not touch ?70,000 in 12 months. However, if your sales touch that figure or let’s say you sell goods to vat registered traders then you would be better off being a vat registered trader in the UK. Vat continues to be employed as a means of collecting taxes on goods and services in the majority of of Europe as well as the UK too follows this method. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.
Once you have crossed over the vat threshold limit for uk vatnumbersearch.com then you’ll have to apply for vat registration. You can do so before you reach this limit if you feel that you need to reclaim vat that has previously been paid on goods and services, specifically in a different eu country where this system is followed. You should hire the services of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds to ensure that there aren’t any problems in claiming back vat.
Once you do turn into a vat registered trader in the United Kingdom, which could take up to 30 days after you file a web-based vat application then you will have to charge vat as per the 14,000 goods and services classifications given by the hmrc vat department. This will have to be done through each vat invoice that you will be required to issue during each taxable sale. UK has 3 vat rates beginning with the regular rate of 17.5%, reduced vat rate of 5%, and the zero vat rate. Certain goods and services are totally vat exempt too.
Once you are a vat registered trader in order to pay and collect uk vat based on vat invoices then you will also need to file your vat returns regularly. Again, your vat agent will be necessary to calculate vat to be paid or refunded depending on your vat purchases and sales. In case you have imported services or goods in the UK after paying vat within a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You’ll be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc as well as the member country. Overall, vat is a good tax system to prevent double taxation and also plug many loopholes which were found in the conventional sales tax system.
If you are a growing trader in the UK that sells taxable goods to vat registered traders then you will want to maintain the cycle of vat alive by turning into a vat registered trader. Now you can collect and pay uk vat whilst claiming any vat previously paid on imported goods and services, which will will lower tax overheads to some large extent.