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. When you finally turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also enhance your business cash flow.
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 vat validation countries. If you have started a new 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 vat registration with the HM Revenue and Customs or hmrc department. You may also apply before threshold limit is achieved if you sell your goods or services 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 your costs could increase slightly, and when you sell your goods and services locally in the UK at a 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 the hmrc vat department might not take your actions lightly if you’re discovered doing the same. There are many benefits of entering the vat system as it will avoid the problem of double taxation by allowing you to definitely reclaim vat already paid on goods or services in another country too.
The whole process for registration for vat is quite 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 choosing. Once you make an application for vat registration then the procedure for approving your 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 the application so your clients can reclaim vat from their end.
As soon as your application is approved you will receive your distinct vat registration number and can need 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 need to provide a breakdown of all vat paid and collected in your vat returns that will have to be filed periodically as needed by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can apply for vat reclaim once you are a certified vat registered trader.
Vat registration is a simple online procedure that has to be done first if you wish to turn into a vat registered trader in the United Kingdom. You can easily fill the web based vat registration form and submit it to your hmrc vat department when you make an application for registration for vat.