In case you have crossed the threshold limit or want to be 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 turn into a vat registered trader you will then be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also enhance your business cash flow.
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. In case you have started a fresh business vatnumbers.com in the United Kingdom and have touched ?70,000 pounds in taxable sales during the past 1 year then you can apply 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 goods or services 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, as soon as you make an application for vat registration your costs could increase slightly, and if you sell your goods and services locally in the United Kingdom at a retail level then you could choose to remain outside vat if you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities only to remain away from system of vat then this hmrc vat department may not take your actions lightly if you’re discovered doing precisely the same. There are several benefits of entering the vat system as it will avoid 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 but 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 can apply 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 process of approving the application typically takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, in that period you will need to take into account applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from their end.
Once your application is approved you will receive your unique 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 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 provide a breakdown of all vat paid and collected within your vat returns that will have to be filed periodically as required by the hmrc vat department. In case you have already paid vat on goods and services in another eu country then you can apply for vat reclaim once you are a certified vat registered trader.
Vat registration is a straightforward online process that needs to be done first if you wish 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.