In case 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 goods and services. Vat is thus followed whilst trading between member eu countries. If you have started a fresh business in the United Kingdom and also have touched ?70,000 pounds in taxable sales during the past 1 year then you can make an application for vat registration number 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 services or goods to mostly vat registered traders. Vat registration can be done as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as 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 a retail level then you could opt to remain outside vat if you only sell vat exempt goods. However, if you try to artificially make an effort 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 precisely the same. There are many advantages of entering the vat system since it will prevents the problem of double taxation by allowing you to reclaim vat already paid on goods or services overseas too.
The whole process for registration for vat is pretty simple however, if you aren’t sure about yourself then you should simply appoint an expert vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You are able to make an application for vat using your vat agent too provided you inform the department of your choosing. Once you make an application for vat registration then this procedure for approving your 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 have to take into account 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 eligible you will receive your distinct vat registration number and can have to display it on all vat documents as well as your vat invoices, vat returns, and vat refunds. You will also have to issue a vat invoice that separately shows all vat rates applied in the invoice together with your vat no at the top. You will have to give a breakdown of all vat paid and collected in your vat returns which will have to be filed periodically as needed 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’re an official 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 simply fill the web based vat registration form and submit it to the hmrc vat department when you apply for registration for vat.