If you are a trader in the United Kingdom with rising taxable sales then you need to pay uk vat to relish all benefits provided by this taxation system Www.vatcheck.com. As soon as your taxable sales touch the vat threshold limit of ?70,000 in the past Twelve months then you’ll need to apply for vat registration in order that you too can become part of this tax system that’s in force in most Europe.
If you’re a really small trader that mostly sells retail goods then you can remain out of the purview of vat or value added tax as 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 then you would be better off being a vat registered trader in the United Kingdom. Vat has been employed as a way of collecting taxes on goods and services in the majority of of Europe as well as the UK too follows this method. The vat department in the United Kingdom is headed by HM Revenue and Customs or hmrc department.
Once you have crossed over the vat threshold limit for uk VAT then you’ll have to make an application for vat registration. That can be done before you reach this limit if you feel that you have to reclaim vat which has already been paid on goods and services, specifically in a different eu country where this system is followed. You ought to do the hiring of 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.
As soon as you do turn into a vat registered trader in the United Kingdom, which could take up to a month once you file a web-based vat application then you will have to charge vat according to the 14,000 goods and services 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 beginning with the standard rate of 17.5%, reduced vat rate of 5%, and the zero vat rate. Certain goods and services are totally vat exempt too.
Once you turn into a vat registered trader so as to pay and collect uk vat based on vat invoices then you will also have to file your vat returns on a regular basis. Again, your vat agent will be required to calculate vat to get paid or refunded based on your vat purchases and sales. In case 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’ll be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc and the member country. Overall, vat is an excellent tax system to prevent double taxation as well as plug many loopholes that were present in the conventional sales tax system.
If you’re a growing trader in the United Kingdom that sells taxable goods to vat registered traders then you will want to maintain the cycle of vat alive by getting to be a vat registered trader. You can now collect and pay uk vat while also claiming any vat previously paid on imported goods and services, which will will lower tax overheads to a large extent.