If you’re a trader in the UK or any other EU country that has adopted or value added tax to be a method of collecting taxes then for selling to vat registered traders it seems sensible to register for vat. It will be possible to pass on vat benefits to the customers while also being able to reclaim vat that may already have been paid in another country.
In the United Kingdom you can register as being a vat registered trader irrespective of whether you are an individual running a business, a partnership, a club, a company, an association, or any other https://vatnumbers.com kind of organisation. Basically, if you are dealing in services or goods that attract vat then you can get registered for vat. Additionally, if most of your clients are vat registered dealers it definitely is a good idea for you to continue the vat tax chain and turn into a vat registered dealer.
If your taxable sales cross over the vat threshold limit of ?70,000 in the previous 12 months then you are qualified to apply for vat registration. However, you can also volunteer to get registered for vat before crossing the threshold limit too. Vat is an efficient way of taxing goods and services to be able to prevent the problem of double taxation as well as create transparency within the tax system. If you’re planning to import goods or services into the UK and then sell them locally you’ll be able to also apply for vat refunds as soon as you become an official vat registered trader. You will have to apply at the HM revenue and customs department or hmrc department, which inturn will forward your refund application to the concerned eu country.
Once you sign up for vat with the hmrc department and turn into an official vat registered dealer then you will have to issue a vat invoice that has been specified by hmrc. You will need to mention your vat number, vat rate and vat amount within the invoice. UK has 3 types of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some goods and services with a social impact are also vat exempt. You will first need to check as to which vat rate applies to each products or services before you start issuing vat invoices and start charging the applicable rates.
The vat rules in several eu countries which have adopted vat are slightly different and if you plan to import goods from such countries then you need to understand much more than merely what is vat. A professional vat agent with plenty of understanding of customs and excise duties that also knows all about uk vat and eu vat rules should be hired for smooth import of products and services into the UK. As soon as you turn into a vat registered dealer then you’ll definitely also have to file vat returns at the hmrc specified periods. In case you deal in vat exempted goods then you will be unable to claim any vat refunds.
The hmrc offers vat registered dealers an opportunity to file their vat returns online itself. Your agent may also file the return for you. However, before you become a part of the vat cycle you have to first register for vat so that you can also enjoy all tax benefits offered by this tax system.
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