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Claim reverse charge vat on services where vat has already been paid

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If you’re a vat registered trader in Britain then you can avoid the problem of double taxation on services utilized from foreign companies when 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 your net cost doesn’t increase.

If you’re a trader which uses services of foreign companies, especially those located in vat-friendly eu countries then you might have already paid vat in those countries. Alternatively, you might also have obtained such services in Britain itself from a supplier situated in a eu country. Every one of these factors would turn out boosting 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 along with the European Community simplification regulations.

If you have a lttle bit difficulty in interpreting these vat rules then you should enrol the services of a good customs and excise customs vat agent with a wide reach in most eu countries that practise vat. This kind of agent www.vatvalidation.com 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 located in another country including a vat-friendly eu country.

You can reclaim vat already paid for specified services while filing your vat returns itself. If you are in Britain then you’ll have to calculate and indicate how much paid in Box 1 of the vat return form. You will then have to specify the same amount in Box 4 of the return to ensure the amount stands cancelled. You will also need to specify the total amount 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 need 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 may go for this type of vat reclaim only if you’re a vat registered trader in Britain. In order to become a vat registered trader, your taxable sales need to go over ?70,000 in the previous 12 months although you can even apply before this vat threshold amount may be achieved. As soon as you start charging vat to your customers and file regular vat returns then any services rendered by you an overseas company can 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 always better to choose services of a proficient vat agent that may handle all your vat requirements seamlessly. This will likely enable you to concentrate on boosting your business while your vat agent files for reverse charge vat and recovers your taxes which may have already been paid for services rendered by way of a foreign company within and out the UK.