If you are a vat registered trader in Britain then you can steer clear of 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 after that cancel it out so your net cost doesn’t increase.
If you are a trader which uses services of foreign companies, particularly those situated in vat-friendly eu countries then you might have already paid vat in those countries. Alternatively, you might also have received such services in Britain itself from a supplier situated in a vatnumbersearch.com eu country. All these factors would turn out increasing your expenses since 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 in conjunction with the European Community simplification regulations.
In case you have a lttle bit difficulty in interpreting these vat rules then you should enrol the expertise of a good customs and excise customs vat agent having a wide reach in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and could help you to claim reverse charge vat that might have been paid to a foreign company situated in another country including a vat-friendly eu country.
You can reclaim vat already covered specified services while filing your vat returns itself. If you are in Britain then you will have to calculate and indicate how much paid in Box 1 of the vat return form. You will then need to specify the same amount in Box 4 of the return to ensure the amount stands cancelled. You will also have to specify the full quantity of the provision in Box 6 and 7 in the vat return form so as to complete your reverse charge vat claim. However, you will have to convert the currency of the vat paid in a foreign country to sterling before you fill in the amounts in those boxes.
This reverse charge process is also known as tax shift and you can go for this type of vat reclaim only if you’re a vat registered trader in the UK. In order to become a vat registered trader, your taxable sales have to go over ?70,000 in the last 1 year although you can even apply before this 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 are not very difficult, it is usually better to opt for the services of an proficient vat agent that may handle all your vat requirements seamlessly. This will likely allow you to focus on boosting your business while your vat agent files for reverse charge vat and recovers your taxes which may have already been taken care of services rendered by a foreign company within and out the UK.