If you have crossed the threshold limit or wish to become 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. Once you turn into a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs as well as enhance 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 fresh business in the United Kingdom and also have touched ?70,000 pounds in taxable sales in the past 1 year then you can apply for vatregistrationnumber.com vat registration with the HM Revenue and Customs or hmrc department. You may also apply before 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, once you apply for vat registration then your costs could increase slightly, and if you sell your goods and services locally in the United Kingdom at the retail level then you may choose to remain outside vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities only to remain outside the system of vat then this hmrc vat department may not take your actions lightly in case you are discovered doing precisely the same. There are several benefits 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 aren’t sure about yourself then you should simply appoint an expert 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 apply for vat using your vat agent too provided you inform the department of your choice. Once you apply for vat registration then the process of 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 need to take into account applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from their end.
Once your application is eligible then you will receive your unique vat registration number and may have to display it on all vat documents as well as 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 top. You will have to provide a breakdown of all vat paid and collected within your vat returns which will have to be filed periodically as required by the hmrc vat department. If you have already paid vat on products or services in another eu country then you can certainly apply for vat reclaim once you are a certified vat registered trader.
Vat registration is a simple online procedure that needs to be done first if you wish to turn into a vat registered trader in the UK. You can simply fill up the online vat registration form and submit it to your hmrc vat department whenever you make an application for registration for vat.