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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 the UK then you can 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 then cancel it so that your net cost does not increase.

If you are a trader that utilizes 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 http://vatnumbersearch.com have received such services in Britain itself from a supplier located in a eu country. All these factors would end up increasing your expenses as you could end up paying vat on certain services including those related to land, property, intra EC-freight services, and other such services as defined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification regulations.

If you have a little difficulty in interpreting these vat rules you then should enrol the services 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 might have already been paid to a foreign company situated in another country including a vat-friendly eu country.

You are able to reclaim vat already paid for specified services while filing your vat returns itself. If you’re in the UK then you will need to calculate and indicate the amount of paid in Box 1 of your vat return form. You will then need to specify exactly the same amount in Box 4 of that return to ensure the amount stands cancelled. You’ll need to specify the total 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 need to convert the currency of any vat paid in a foreign country to sterling before you fill in the amounts in those boxes.

This reverse charge process can also be called tax shift and you may go in for this type of vat reclaim only if you are 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 last 1 year while you can even apply before vat threshold amount has been achieved. As soon as you start charging vat to the 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 preferable to opt for the services of a proficient vat agent that may handle all of 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 previously been paid for services rendered by way of a foreign company within and out the UK.