Apply for registration for vat to turn into a vat registered trader
In case you have crossed the threshold limit or want to become 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 are a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs as well as improve your business earnings.
Several eu countries like the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing products or services. Vat is thus followed even while trading between member eu countries. In case you have started a fresh business in the UK and have touched ?70,000 pounds in taxable sales in the past 1 year then you can apply for vat registration with the HM Revenue and Customs or hmrc department. You may also apply before this threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be achieved as being an individual, partnership, company, trust, etc as deemed fit by the hmrc department.
However, as soon as you make an application for vat registration then your costs could increase slightly, and when you sell your products or services locally in the United Kingdom at a retail level then you could choose to remain outside of vat should you only sell vat exempt goods. However, if you try to artificially make an effort to separate your business activities only to remain outside the system of vat then this hmrc vat department might not take your actions lightly if you’re discovered doing precisely the same. There are several benefits of entering the vat system since it will prevents the problem of double taxation by allowing you to definitely reclaim vat already paid on services or goods in another country too.
The whole process for registration for vat is pretty simple however, if you aren’t sure about yourself then you should simply appoint a professional 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 using your vat agent too provided you inform the department of your choice. As soon as you make an application for vat registration then the procedure for approving your application usually takes between 10 to 30 days. Fo the time being you can continue issuing regular invoices to your clients. However, during 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.
As soon as your application is eligible you will receive your distinct vat registration number and can have 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 have to be filed periodically as needed by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can try for vat reclaim once you are an official vat registered trader.
Vat registration is a straightforward online process that has to be done first if you wish to turn into a vat registered trader in the United Kingdom. You can simply fill up the web based vat registration form and submit it to the hmrc vat department whenever you apply for registration for vat.