Make an application for registration for vat to turn into a vat registered trader
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 apply 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 decrease your costs as well as enhance your business earnings.
Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed even while trading between member eu countries. In case you have started a new business 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 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 when you sell your products or services locally in the United Kingdom at the retail level then you could choose to remain outside of vat should you only sell vat exempt goods. However, if you try to artificially try to separate your business activities simply to remain away from system of vat then the hmrc vat department may not take your actions lightly in case you are discovered doing the same. There are several advantages of entering the vat system since it will avoid the problem of double taxation by permitting you to definitely reclaim vat already paid on services or goods overseas too.
The entire process for registration for vat is quite simple however, if you are not sure about yourself then you definitely 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 using your vat agent too provided you inform the department of your choice. Once you make an application for vat registration then the procedure for approving the application typically takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, in 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 their end.
Once your application is approved 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 probably need to issue a vat invoice that separately shows all vat rates applied in the invoice along with your vat no at the very top. You will have to give a summary of all vat paid and collected within 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 certainly try for vat reclaim once you are an official 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 UK. You can easily fill up the web based vat registration form and submit it to the hmrc vat department when you apply for registration for vat.