If you have crossed the threshold limit or wish to be a part of the vat or value added tax system then you will need to make an application 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 and also improve your business earnings.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed even while trading between member eu countries. If you have started a fresh business in the UK and also have touched ?70,000 pounds in taxable sales during the past 12 months then you can definitely make an application for 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 achieved as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, once you apply 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 opt to remain outside of vat should 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 the hmrc vat department might not take your actions lightly if you’re discovered doing precisely the same. There are several advantages of entering the vat system as it will prevents the problem of double taxation by permitting you to reclaim vat already paid on goods or services overseas too.
The whole process for registration for vat is quite simple however, if you are not sure about yourself then you definitely 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 make an application for vat through your vat agent too provided you inform the department of your choice. Once you make an application for vat registration then this procedure for approving your 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 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.
As soon as your application is approved you will receive your distinct vat registration number and may need to display it on all vat documents including 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 together with your vat no at the top. You will need to provide a breakdown of all vat paid and collected in your vat returns which will need 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 try for vat reclaim once you’re a certified vat registered trader.
Vat registration is a simple online process that has to be done first if you wish to turn into a vat registered trader in the UK. You can easily fill the web based vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.