If you are a trader in the UK or other EU country that has adopted or value added tax as a way of collecting taxes then for selling to vat registered traders it makes sense to sign up for vat. It will be possible to pass on vat benefits to your customers whilst being able to reclaim vat that might already have been paid in another country.
In the UK you can register as being a vat registered trader regardless of whether you are an individual running a business, a partnership, a club, an organization, an association, or any other www.vatnumbers.com kind of organisation. Basically, if you are dealing in goods or services that attract vat then you can get registered for vat. In addition, if most of your customers are vat registered dealers it definitely makes sense for you to continue the vat tax chain and turn into a vat registered dealer.
If your taxable sales cross over the vat threshold limit of ?70,000 in the last Yr then you’re entitled to vat registration. However, you can also volunteer to obtain registered for vat before crossing the threshold limit too. Vat is an efficient way of taxing products or services to be able to avoid the problem of double taxation as well as bring about transparency within the tax system. If you’re planning to import goods or services to the UK and then sell them locally you’ll be able to also make an application for vat refunds once you become the official vat registered trader. You will need to apply at the HM revenue and customs department or the hmrc department, which inturn will forward your refund application towards the concerned eu country.
As soon as you sign up for vat with the hmrc department and turn into an official vat registered dealer then you’ll have to issue a vat invoice that has been specified by hmrc. You will have to mention your vat number, vat rate and vat amount within the invoice. UK has 3 kinds of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some goods and services having a social impact are also vat exempt. You’ll first need to check as to which vat rate applies to each products or services before you begin issuing vat invoices and begin charging the applicable rates.
The vat rules in several eu countries that have adopted vat are slightly different and if you intend to import goods from such countries then you will want to know much more than simply what exactly is vat. An expert vat agent with sufficient understanding of customs and excise duties which also knows all about uk vat and eu vat rules ought to be hired for smooth import of products and services into the UK. Once you turn into a vat registered dealer then you’ll definitely also need to file vat returns at the hmrc specified periods. If you deal in vat exempted goods you will be unable to claim any vat refunds.
The hmrc offers vat registered dealers a chance to file their vat returns online itself. Your agent can also file the return on your behalf. However, before you decide to be a part of the vat cycle you have to first register for vat so that you can also enjoy all tax benefits offered by this tax system.