If you’re a trader in the United Kingdom with rising taxable sales you will need to pay uk vat to relish all benefits provided by this taxation www.vatcheck.com system. As soon as your taxable sales touch the vat threshold limit of ?70,000 in the past 12 months then you’ll need to get vat registration so that you can also become part of this tax system that’s in effect in the majority of European countries.
If you are a really small trader that mostly sells retail goods you’ll be able to remain out of the purview of vat or value added tax so long as your taxable sales don’t touch ?70,000 in Twelve months. However, if your sales touch that figure or if you sell goods to vat registered traders then you would be better off being a vat registered trader in the United Kingdom. Vat continues to be employed as a means 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 United Kingdom is headed by HM Revenue and Customs or hmrc department.
After you have crossed over the vat threshold limit for uk then you will 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 that has already been paid on services and goods, especially in a foreign eu country where this system is followed. You should do the hiring of experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds to ensure that there are no problems in claiming back vat.
Once you do turn into a vat registered trader in the UK, which may extend to a month 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 have to be done through each vat invoice 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 services and goods are totally vat exempt too.
As soon as you turn into a vat registered trader in order to pay and collect uk vat based on vat invoices then you will also need to file your vat returns regularly. Again, your vat agent will be necessary to calculate vat to get paid or refunded based on your vat purchases and sales. In case you have imported services or goods in the United Kingdom 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 and the member country. Overall, vat is an excellent tax system to prevent double taxation and also plug many loopholes which were found in the conventional sales tax system.
If you’re a growing trader in the United Kingdom 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 while also claiming any vat previously paid on imported goods and services, which in turn will lower tax overheads to some website here large extent.