If you have crossed the threshold limit or want 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. Once you are a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs and also enhance your business cash flow.
Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed even while trading between member eu https://vatvalidation.com countries. If you have started a fresh business in the United Kingdom and also have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely make an application 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 services or goods to mostly vat registered traders. Vat registration can be done as being 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 when you sell your goods and services locally in the United Kingdom at the retail level then you may 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 enterprise activities simply to remain outside the system of vat then this hmrc vat department may not take your actions lightly if you’re discovered doing the same. There are many advantages 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 in another country too.
The whole 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 handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You are able to 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 the procedure for approving the application usually takes between 10 to 30 days. Fo the time being you can continue issuing regular invoices to your clients. However, in that period you will have to factor in applicable vat rates and re-issue those invoices issued after the application so your clients can reclaim vat from other end.
Once your application is approved then you will receive your distinct vat registration number and will have 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 that invoice together with your vat no at the very top. You will have to provide a summary of all vat paid and collected within your vat returns that will have to be filed periodically as needed by the hmrc vat department. In case you have already paid vat on products or services in another eu country then you can certainly apply for vat reclaim once you’re a certified vat registered trader.
Vat registration is a simple online process that needs to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill up the online vat registration form and submit it to your hmrc vat department whenever you apply for registration for vat.