Pay uk vat to relish all benefits provided by this taxation system
If you are a trader in the UK with rising taxable sales you will need to pay uk vat to enjoy all benefits offered by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 in the past 12 months then you need to get vat registration in order that you can also become part of this tax system that’s in force in most European countries.
If you are 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, if your sales touch that figure or let’s say you sell goods to vat registered traders you would be better off being a vat registered trader in the UK. Vat has been employed as a means of collecting taxes on products or services in most of Europe and the UK too follows this system. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.
Once you have crossed over the vat threshold limit for uk https://vatnumbersearch.com then you’ll need to make an application for vat registration. You can do so before you reach this limit if you feel that you need to reclaim vat which has previously been paid on goods and services, especially in a different eu country where this system is followed. You should hire the services of an experienced vat agent well conversed in uk and eu vat rules for vat registration purposes and for filing of vat refunds so that there are no problems in claiming back vat.
Once you do turn into a vat registered trader in the UK, which may extend to a month after you file a web-based vat application then you’ll need to charge vat according to the 14,000 services and goods classifications provided by the hmrc vat department. This will have to be done through each vat invoice that you will be required to issue during each taxable sale. UK has 3 vat rates starting with the regular 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.
Once you are a vat registered trader in order to pay and collect uk vat determined by vat invoices then you’ll also need to file your vat returns regularly. Again, your vat agent will be required to calculate vat to be paid or refunded depending on your vat purchases and sales. If you have imported goods or services in the UK after paying vat in a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc as well as the member country. Overall, vat is an excellent tax system to prevent double taxation and also plug many loopholes which were present in the conventional sales tax system.
If you are a growing trader in the UK that sells taxable goods to vat registered traders then you will want to keep the cycle of vat alive by turning into a vat registered trader. Now you can collect and pay uk vat whilst claiming any vat previously paid on imported goods and services, which will will lower tax overheads to some large extent.