If you’re a vat registered trader in Britain you’ll be able to avoid the problem of double taxation on services utilized from foreign companies whenever you claim reverse charge vat on services where vat was already paid. This vat procedure allows you to first pay vat and after that cancel it out so that your net cost doesn’t increase.
If you’re a trader which uses services of foreign companies, especially those situated in vat-friendly eu countries then you may have already paid vat in those countries. On the other hand, you may also have obtained such services in the UK itself from the supplier situated in a eu country. Every one of these factors would end up www.vatcontrol.com increasing your expenses as you could end up paying vat on certain services including those linked 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.
In case you have a bit difficulty in interpreting these vat rules you then should enrol the expertise of a good customs and excise customs vat agent with a wide reach in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and may help you to claim reverse charge vat that may have been paid to a foreign company situated in another country together with a vat-friendly eu country.
You are able to reclaim vat already covered 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 your vat return form. You will then have to specify exactly the same amount in Box 4 of the return so that the amount stands cancelled. You will also need to specify the total quantity of the supply in Box 6 and 7 of the vat return form in order to complete your reverse charge vat claim. However, you will have to convert the currency of any vat paid in the foreign country to sterling before you fill in the amounts in those boxes.
This reverse charge process is also called tax shift and you can go in for this type of vat reclaim only if you’re a vat registered trader in the UK. In order to be a vat registered trader, your taxable sales have to cross over ?70,000 in the previous 12 months while you can even apply before vat threshold amount may be achieved. Once you start charging vat to the customers and file regular vat returns then any services rendered by you a foreign company could be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.
Although following vat rules usually are not really hard, it is always preferable to opt for the services of a proficient vat agent that can handle all of your vat requirements seamlessly. This will likely allow you to focus on increasing your business while your vat agent files for reverse charge vat and recovers your taxes that have previously been paid for services rendered by a foreign company within or outside the UK.