Pay uk vat to relish all benefits offered by this taxation system
If you’re a trader in the UK with rising taxable sales then you need to pay uk vat to relish all benefits provided by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 in the past https://vatnumbers.com Twelve months then you need to get vat registration in order that you can also end up part of this tax system that’s in effect in most European countries.
If you’re a really small trader that mostly sells retail goods then you can remain out of the purview of vat or value added tax so long as your taxable sales do not touch ?70,000 in Twelve months. However, in case your sales touch that figure or let’s say you sell goods to vat registered traders then you would be better off as a vat registered trader in the UK. Vat continues to be employed as a way of collecting taxes on products or services in most of Europe as well as the UK too follows this method. The vat department in the United Kingdom is headed by HM Revenue and Customs or hmrc department.
After you have crossed over the vat threshold limit for uk then you will have to make an application for vat registration. That can be done before you reach this limit if you feel that you have to reclaim vat that has previously been paid on services and goods, especially in a different eu country where this system is followed. You should do the hiring of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes and for filing of vat refunds to ensure that there are no problems in claiming back vat.
Once you do turn into a vat registered trader in the UK, which could extend to 30 days once you file an online vat application then you’ll need to charge vat as per the 14,000 goods and services classifications given by the hmrc vat department. This will have to be done through each vat invoice you will be needed to issue during each taxable sale. UK has 3 vat rates starting with the standard rate of 17.5%, reduced vat rate of 5%, as well as the zero vat rate. Certain goods and services are totally vat exempt too.
As soon as you are a vat registered trader in order to pay and collect uk vat determined by vat invoices then you’ll also have to file your vat returns regularly. Again, your vat agent is going to be necessary to calculate vat to be paid or refunded depending on your vat purchases and sales. If you have imported services or goods in the UK after paying vat within a eu country then you can avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between four to eight months after your claim is successfully processed by hmrc as well as the member country. Overall, vat is an excellent tax system to avoid double taxation and also plug many loopholes which were found in the traditional sales tax system.
If you’re a growing trader in the UK that sells taxable goods to vat registered traders then you need to maintain the cycle of vat alive by turning into a vat registered trader. Now you can collect and pay uk vat while also claiming any vat previously paid on imported products or services, which in turn will lower tax overheads to a large extent.