Claim reverse charge vat on services where vat has already been paid

If you’re a vat registered trader in Britain then you can avoid the problem of double taxation on services utilized from foreign companies when you claim reverse charge vat on services where vat was already paid. This vat procedure allows you to first pay vat and then cancel it so your net cost does not increase.

If you’re a trader which uses services of foreign companies, particularly those situated in vat-friendly eu countries then you certainly may have already paid vat in those countries. Alternatively, you might also have obtained such services in the UK itself from a supplier situated in a eu country. All these factors would end up boosting your expenses as you could end up paying vat on certain services including those linked to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification regulations.

In case you have a bit difficulty in interpreting these vat rules then you should enrol the services of a good customs and excise customs vat agent with a wide reach practically in most eu countries that practise vat. This kind of agent would surely understand all uk vat and eu vat regulations and may help you to claim reverse charge vat that may have already been paid to a foreign company located in another country including a vat-friendly eu country.

You can reclaim vat already paid for specified services while filing your vat returns itself. If you’re in the UK then you’ll have to calculate and indicate how much paid in Box 1 vatnumbersearch.com of the vat return form. You will then have to specify the same amount in Box 4 of the return to ensure the amount stands cancelled. You will also need to specify the full quantity of the provision in Box 6 and 7 of the vat return form so as to complete your reverse charge vat claim. However, you will have to convert the currency of the vat paid in the foreign country to sterling before you fill out the amounts in those boxes.

This reverse charge process can also be known as tax shift and you can go in for such a vat reclaim only when you are a vat registered trader in Britain. In order to become a vat registered trader, your taxable sales have to cross over ?70,000 in the last 1 year although you can even apply before this vat threshold amount may be achieved. Once you start charging vat to your customers and file regular vat returns then any services rendered by you an overseas company can be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.

Although following vat rules are not really hard, it is usually better to choose services of proficient vat agent that can handle all your vat requirements seamlessly. This will enable you to focus on boosting your business while your vat agent files for reverse charge vat and recovers your taxes that have already been paid for services rendered by way of a foreign company within and out the UK.