If you’re a trader in the UK with rising sales or wish to voluntarily enter the VAT tax system you’ll need uk vat registration if you want to charge or reclaim vat. Once you are a uk vat registered trader you’ll be able to start charging vat or value added tax to your clients and even reclaim previously paid vat on goods and services, even if paid in another eu country.
Much like most other countries inside the European Union like Greece, Spain, Poland, Sweden, Germany, Italy, etc, the UK too embraced the system of vat as a way of taxing services and goods. In case your organization is quite small , your end-clients are individuals that do not need vat invoices you would then be better off by remaining outside of the scope of vat as this will lower your costs. However, when your taxable sales cross ?70,000 in the earlier Yr then you’ll have to register for vat unless you deal only in vat exempt services or goods vat registration.
On the flip side, in case your clients want you to charge vat to them so that they can offset it against their sales then you can make an application for vat registration before the vat threshold limit has been achieved. You can apply for uk vat registration as being an individual, partnership, company, club, association, charity, etc depending on the nature of your business. You will need to apply online for registration to your HM Revenue and Customs department or hmrc department provided you meet all criteria presented by them.
If you import taxable goods from other eu and non-eu countries to sell them locally, re-export services or goods outside of the UK, or even buy goods locally to resell them, then you’ll need to get vat registered in the UK, especially if you have crossed over the vat threshold limit. You are able to apply for online vat application only when you use VAT 1 form, which happens to be for small businesses run by individuals. Other registration forms can be downloaded but will have to be filled manually before being dispatched to the hmrc vat department for processing. You need to get your vat number within 1 month of applying, provided all your documents are typically in order.
You may be in a position to issue a vat invoice against each sale and will also need to specify vat rates against each goods and services. Additionally, you will need to file vat returns as decided by the hmrc department. However, if you have already paid vat on goods and services, even if these were paid in another eu country then you will be able to file for vat refund and receive that amount back into your bank account. This feature might help improve your business cash-flow whilst lowering your product or services costs. In case you have difficulty in understanding uk vat and eu vat rules then a professional vat agent may help solve all of your problems related to vat returns and vat refunds so your business continues growing without taxation hiccups read more here.
In case your business is poised to sneak above the vat threshold limit of ?70,000 in taxable sales then you will have to turn over a vat registered trader. However, it is a relocation in the correct direction since once you complete your uk vat registration process and turn a vat registered trader you will then be in a position to claim for vat refunds and infuse that money in your business.