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Claim reverse charge vat on services where vat has already been paid


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If you are a vat registered trader in Britain then you can steer clear of the problem of double taxation on services utilized from foreign companies whenever you claim reverse charge vat on services where vat was already paid. This vat procedure will allow you to first pay vat and after that cancel it so your net cost does not increase.

If you are a trader which uses services of foreign companies, especially those located in vat-friendly eu countries then you might have already paid vat in those countries. Alternatively, you might also www.vatnumbersearch.com have received such services in Britain itself from a supplier situated in a eu country. Every one of these factors would end up boosting your expenses as you could end up paying vat on certain services including those related to land, property, intra EC-freight services, and other such services as defined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification regulations.

If you have a bit difficulty in interpreting these vat rules then you should enrol the expertise of a competent customs and excise customs vat agent having a wide reach in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and may help you to claim reverse charge vat that may have already been paid to a foreign company situated in another country together with a vat-friendly eu country.

You can reclaim vat already covered specified services while filing your vat returns itself. If you are in Britain then you will need to calculate and indicate how much paid in Box 1 of your vat return form. You will then have to specify exactly the same amount in Box 4 of that return to ensure the amount stands cancelled. You’ll need to specify the total amount of the provision in Box 6 and 7 of the vat return form so as to complete your reverse charge vat claim. However, you will need to convert the currency of the vat paid in a foreign country to sterling before you fill in the amounts in those boxes.

This reverse charge process can also be known as tax shift and you may go in for such a vat reclaim only when you are a vat registered trader in the UK. In order to be a vat registered trader, your taxable sales need to cross over ?70,000 in the previous 1 year although you may even apply before this vat threshold amount may be achieved. As soon as you start charging vat to the customers and file regular vat returns then any services rendered by you from an overseas company could be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.

Although following vat rules are not really hard, it is usually preferable to opt for the services of proficient vat agent that can handle all of your vat requirements seamlessly. This will enable you to concentrate on increasing your business while your vat agent files for reverse charge vat and recovers your taxes that have previously been taken care of services rendered by a foreign company within or outside the UK.