If you’re a vat registered trader in the UK then you can avoid the problem of double taxation on services utilized from foreign companies when you claim reverse charge vat on services where vat has already been paid. This vat procedure will allow you to first pay vat and then cancel it so your net cost doesn’t increase.
If you are a trader that utilizes services of foreign companies, particularly those located in vat-friendly eu countries then you certainly might have already paid vat in those countries. Alternatively, you may also www.vatnumbersearch.com have received such services in Britain itself from a supplier situated in a eu country. All these factors would turn out boosting your expenses as you could end up paying vat on certain services including those related to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department along with the European Community simplification regulations.
If you have a little difficulty in interpreting these vat rules then you should enrol the expertise of a competent customs and excise customs vat agent having a wide reach in most eu countries that practise vat. This kind of agent would surely understand all uk vat and eu vat regulations and may enable you to claim reverse charge vat that might have been paid to a foreign company located in another country including a vat-friendly eu country.
You can reclaim vat already paid for specified services while filing your vat returns itself. If you’re in the UK then you will need to calculate and indicate how much paid in Box 1 of the vat return form. You’ll then need to specify the same amount in Box 4 of that return so that the amount stands cancelled. You will also have to specify the full amount of the provision in Box 6 and 7 in the vat return form in order to complete your reverse charge vat claim. However, you will need to convert the currency of the vat paid in the foreign country to sterling before you fill in the amounts in those boxes.
This reverse charge process can also be called tax shift and you may go in for this type of vat reclaim only if you are a vat registered trader in Britain. In order to become a vat registered trader, your taxable sales need to go over ?70,000 in the previous 12 months while you may even apply before vat threshold amount has been achieved. Once you start charging vat to the customers and file regular vat returns then any services rendered by you from a foreign company could be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department.
Although following vat rules are not very difficult, it is usually better to choose services of proficient vat agent that can handle all of your vat requirements seamlessly. This will enable you to concentrate on increasing your business while your vat agent files for reverse charge vat and recovers your taxes that have already been taken care of services rendered by way of a foreign company within and out the UK.