If you have crossed the threshold limit or wish to become 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 turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby lower your costs as well as improve your business earnings.
Several eu countries like 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 countries. In case you have started a fresh business www.vatnumbers.com in the United Kingdom and have touched ?70,000 pounds in taxable sales in 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 threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be achieved as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you make an application 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 could choose to remain outside vat should you only sell vat exempt goods. However, if you try to artificially try to separate your enterprise activities only to remain away from system of vat then the hmrc vat department might not take your actions lightly in case you are discovered doing the same. There are many 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 overseas too.
The whole process for registration for vat is pretty simple however, 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 can make an application for vat through your vat agent too provided you inform the department of your choice. As soon as you apply for vat registration then the procedure for approving the application usually takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during 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 other end.
Once your application is eligible then you will receive your unique vat registration number and can have to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will also need to issue a vat invoice that separately shows all vat rates applied in the invoice together with your vat no at the very top. You will have to provide a summary of all vat paid and collected in your vat returns which will need to be filed periodically as required by the hmrc vat department. In case you have already paid vat on products or services in another eu country then you can apply for vat reclaim once you’re an official vat registered trader.
Vat registration is a straightforward online process that has to be done first if you want to turn into a vat registered trader in the UK. You can simply fill up the web based vat registration form and submit it to the hmrc vat department whenever you make an application for registration for vat.