For selling to to vat registered traders it makes sense to sign up for vat

If you’re a trader in the UK or other EU country that has adopted or value added tax as a method of collecting taxes then for selling to vat registered traders it makes sense to register for vat. You will be able to pass on vat benefits to the customers while also having the ability to reclaim vat that may already have been paid in another country.

In the UK you are able to register as a vat registered trader regardless of whether you are an individual operating a business, a partnership, a club, an organization, an association, or any other vatnumbers kind of organisation. Basically, if you are dealing in goods or services that attract vat then you can get registered for vat. Additionally, if most of your clients are vat registered dealers then it definitely is a good idea that you continue the vat tax chain and turn a vat registered dealer.

In case your taxable sales go over the vat threshold limit of ?70,000 in the last Yr then you’re qualified to apply for vat registration. However, you can also volunteer to obtain registered for vat before crossing the threshold limit too. Vat is an excellent method of taxing products or services to be able to prevent the problem of double taxation as well as bring about transparency in the tax system. If you’re planning to import goods or services into the UK and then sell them locally you’ll be able to also apply for vat refunds once you become an official vat registered trader. You will need to apply at the HM revenue and customs department or the hmrc department, which in turn will forward your refund application towards the concerned eu country.

Once you register for vat with the hmrc department and turn into an official vat registered dealer then you will need to issue a vat invoice that has been specified by hmrc. You will have to mention your vat number, vat rate and vat amount within the invoice. UK has 3 kinds of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some goods and services with a social impact are usually vat exempt. You’ll first have to check with regards to which vat rate applies to each products or services before you begin issuing vat invoices and start charging the applicable rates.

The vat rules in different eu countries which have adopted vat are slightly different and if you plan to import goods from such countries then you will want to know much more than merely what exactly is vat. A professional vat agent with sufficient knowledge of customs and excise duties which also knows information about uk vat and eu vat rules should be hired for smooth import of products and services to the UK. Once you turn into a vat registered dealer then you will also need to file vat returns at the hmrc specified periods. In case you deal in vat exempted goods then you will not be able to claim any vat refunds.

The hmrc offers vat registered dealers an opportunity to file their vat returns online itself. Your agent may also file the return on your behalf. However, before you decide to be a part of the vat cycle you need to first register for vat so that you too can enjoy all tax benefits provided by this tax system.