If you are a trader in the UK with rising taxable sales you will need to pay uk vat to relish all benefits provided by this taxation system. Once your taxable sales touch the vat threshold limit of ?70,000 during the past Twelve months then you’ll need to apply for vat registration in order that you can also end up part of this tax system that is in effect in the majority of European countries.
If you are a really small trader that mostly sells retail goods then you can remain from the purview of vat or value added tax as long as your taxable sales do not touch ?70,000 in Twelve months. However, in case your sales touch that figure or let’s say you sell goods to vat registered traders you would be better off as a vat registered trader in the United Kingdom. Vat has been employed as a way of collecting taxes on products or services in the majority of of Europe as well as the UK too follows this system. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.
Once you have crossed over the vat threshold limit for uk vat number search then you’ll need 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 previously been paid on goods and services, especially in a foreign eu country where this system is followed. You should hire the services of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds so that there aren’t any problems in claiming back vat.
Once you do turn into a vat registered trader in the UK, which could extend to 30 days after you file an online vat application then you’ll need to charge vat as per the 14,000 goods and services classifications provided by the hmrc vat department. This will need to be carried out by each vat invoice that you will be needed to issue during each taxable sale. UK has 3 vat rates starting with the regular rate of 17.5%, reduced vat rate of 5%, as well as 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 determined by vat invoices then you will also have to file your vat returns regularly. Again, your vat agent is going to be necessary to calculate vat to be paid or refunded based on your vat purchases and sales. In case you have imported services or goods in the UK after paying vat within a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc as well as the member country. Overall, vat is a good tax system to avoid double taxation and also plug many loopholes that were found in the traditional sales tax system.
If you are a growing trader in the UK 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 whilst claiming any vat previously paid on imported goods and services, which will will lower tax overheads to a large extent.