Apply for registration for vat to turn into a vat registered trader
If you have crossed the threshold limit or wish to become a part of the vat or value added tax system then you’ll need to make an application for registration for vat to turn into a vat registered trader. Once you turn into a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby decrease your costs and also enhance your business cash flow.
Several eu countries including 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. In case you have started a new business in the United Kingdom and also have touched ?70,000 pounds in taxable sales in the past 12 months then you can apply for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before threshold limit is achieved if you sell your services or goods to mostly vat registered traders. Vat registration can be done as 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 if you sell your goods and services locally in the UK at a retail level then you could opt to remain outside vat if you only sell vat exempt goods. However, if you try to artificially make an effort to separate your enterprise activities simply to remain away from system of vat then the hmrc vat department may not take your actions lightly if you’re discovered doing precisely the same. There are many benefits of entering the vat system as it will avoid the problem of double taxation by permitting you to reclaim vat already paid on goods or services in another country too.
The whole process for registration for vat is quite simple but if you aren’t 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 apply 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 usually takes between 10 to 30 days. Until then you can keep issuing regular invoices to your clients. However, during that period you will need to factor in applicable vat rates and re-issue those invoices issued after your application so your clients can reclaim vat from other end.
As soon as your application is eligible you will receive your distinct vat registration number and can need to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will also need to issue a vat invoice that separately shows all vat rates applied in the invoice together with your vat no at the very top. You will need to provide a summary of all vat paid and collected in your vat returns which will have to be filed periodically as required by the hmrc vat department. If you have already paid vat on products or services in another eu country then you can certainly try for vat reclaim once you’re an official vat registered trader.
Vat registration is a straightforward online process that needs to be done first if you want to turn into a vat registered trader in the UK. You can simply fill the online vat registration form and submit it to your hmrc vat department when you apply for registration for vat.
