If you have crossed the threshold limit or want to become a part of the vat or value added tax system then you will need to make an application for registration for vat to turn into a vat registered trader. When you finally are 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 improve 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 whilst trading between member eu countries. In case you have started a new business vatnumbers in the UK and also have touched ?70,000 pounds in taxable sales in the past 1 year then you can 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 goods or services 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, once you apply for vat registration then your costs could increase slightly, and if you sell your products or services locally in the United Kingdom at the retail level then you could opt 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 outside the system of vat then this hmrc vat department might not take your actions lightly if you’re discovered doing the same. There are several advantages 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 whole 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 deal with all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can apply for vat using your vat agent too provided you inform the department of your choosing. As soon as you apply for vat registration then the process of 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 factor in applicable vat rates and re-issue those invoices issued after the application so that your clients can reclaim vat from other end.
Once your application is eligible then you will receive your unique vat registration number and will have to display it on all vat documents as well as 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 need to provide a breakdown of all vat paid and collected within your vat returns that will have to be filed periodically as required by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can certainly try for vat reclaim once you are a certified vat registered trader.
Vat registration is a simple online process that has to be done first if you want to turn into a vat registered trader in the United Kingdom. You can easily fill up the web based vat registration form and submit it to your hmrc vat department when you make an application for registration for vat.