If you’re a trader in Britain with rising sales or desire to voluntarily enter into the VAT tax system you’ll need uk vat registration if you want to charge or reclaim vat. Once you are a uk vat registered trader then you can start charging vat or value added tax to your clients and also reclaim previously paid vat on services and goods, even when paid in another eu country.
Much like most other countries in the European Union like Greece, Spain, Poland, Sweden, Germany, Italy, etc, Britain too embraced the system of vat as a way of taxing goods and services. If your business is vat registration number quite small and your end-clients are people who don’t need vat invoices you would then be better off by remaining outside of the scope of vat as this will reduce your costs. However, when your taxable sales cross ?70,000 in the earlier 12 months then you will need to register for vat unless you deal only in vat exempt services or goods.
On the flip side, if your clients would like you to charge vat for them to enable them to offset it against their sales then you can make an application for vat registration before the vat threshold limit has been achieved. You are able to apply for uk vat registration as being an individual, partnership, company, club, association, charity, etc dependant upon the nature of the business. You will need to apply online for registration to your HM Revenue and Customs department or hmrc department provided you meet all criteria presented by them.
If you import taxable goods from other eu and non-eu countries to sell them locally, re-export services or goods outside the UK, or even buy goods locally to resell them, then you’ll need to get vat registered in the UK, especially if you have crossed over the vat threshold limit. You are able to make an application for online vat application only if you use VAT 1 form, which happens to be for small businesses run by individuals. All other registration forms can be downloaded but will have to be filled manually before being dispatched to the hmrc vat department for processing. You should get your vat number within 1 month of applying, provided all your documents are in order.
You will now be in a position to issue a vat invoice against each sale and will also have to specify vat rates against each goods and services. You will also have to file vat returns as decided by the hmrc department. However, if you have already paid vat on goods and services, even if they were paid in another eu country then you will be able to apply for vat refund and receive that amount back to your bank account. This feature will help enhance your business cash-flow while also reducing your product or services costs. In case you have difficulty in understanding uk vat and eu vat rules then an expert vat agent may help solve all of your problems associated with vat returns and vat refunds so that your business continues growing without taxation hiccups.
In case your organization is poised to break over the vat threshold limit of ?70,000 in taxable sales then you will need to turn over a vat registered trader. However, it is a relocation in the right direction since once you complete your uk vat registration process and turn a vat registered trader you will then be in a position to claim for vat refunds and infuse those funds into your business.