For supplying to vat registered traders it makes sense to sign up for vat
If you’re a trader in the UK or any other EU country that has adopted or value added tax as a way of collecting taxes then for selling to vat registered traders it makes sense to sign up for vat. It will be possible to pass on vat benefits to the customers whilst having the ability to reclaim vat that may already have been paid in a foreign country.
In the United Kingdom you are able to register as a vat registered trader irrespective of whether you’re an individual operating a business, a partnership, a club, an organization, an association, or other www.vatnumbers.com type of organisation. Basically, if you are dealing in services or goods that attract vat then you can certainly get registered for vat. Additionally, if most of your clients are vat registered dealers then it definitely is a good idea for you to continue the vat tax chain and turn into a vat registered dealer.
If your taxable sales cross over the vat threshold limit of ?70,000 in the previous Yr then you are entitled to vat registration. However, you can also volunteer to get registered for vat before crossing the threshold limit too. Vat is an efficient method of taxing goods and services so as to prevent the problem of double taxation as well as bring about transparency within the tax system. If you are planning to import services or goods into the UK and then sell them locally then you can also apply for vat refunds once you become an official vat registered trader. You will have to apply at the HM revenue and customs department or hmrc department, which inturn will forward your refund application to the concerned eu country.
Once you register for vat with the hmrc department and turn into an official vat registered dealer then you will have to issue a vat invoice that has been specified by hmrc. You will need to mention your vat number, vat rate and vat amount within the invoice. UK has 3 kinds of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some goods and services having a social impact are also vat exempt. You will first have to check as to which vat rate applies to each products or services before you start issuing vat invoices and begin charging the applicable rates.
The vat rules in several eu countries that have adopted vat are slightly different and if you intend to import goods from such countries then you will want to know much more than merely what exactly is vat. An expert vat agent with sufficient understanding of customs and excise duties which also knows information about uk vat and eu vat rules should be hired for smooth import of goods and services to the UK. Once you are a vat registered dealer then you’ll definitely also have to file vat returns at the hmrc specified periods. In case you deal in vat exempted goods you will not be able to claim any vat refunds.
The hmrc offers vat registered dealers a chance to file their vat returns online itself. Your agent can also file the return on your behalf. However, before you be a part of the vat cycle you need to first sign up for vat so that you too can enjoy all tax benefits offered by this tax system.