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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 you’ll be able to steer clear of the problem of double taxation on services utilized from foreign companies whenever you claim reverse charge vat on services where vat has already been paid. This vat procedure will allow you to first pay vat and then cancel it so that your net cost does not increase.

If you are a trader which uses services of foreign companies, especially those situated in vat-friendly eu countries then you might have already paid vat in those countries. Alternatively, you may also have received such services in Britain itself from the supplier situated in a eu country. Every one of these factors would vatvalidation.com end up increasing your expenses as you might 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.

In case you have a bit difficulty in interpreting these vat rules you then should enrol the expertise of a good customs and excise customs vat agent with a wide reach in most eu countries that practise vat. This kind of agent would surely understand all uk vat and eu vat regulations and may enable 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 can reclaim vat already paid for specified services while filing your vat returns itself. If you are in the UK then you’ll have to calculate and indicate how much paid in Box 1 of the vat return form. You’ll then need to specify the same amount in Box 4 of the return so that the amount stands cancelled. You’ll have 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 the 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 can go for such a vat reclaim only when you are a vat registered trader in Britain. In order to be a vat registered trader, your taxable sales have to cross over ?70,000 in the previous 12 months while you can even apply before this vat threshold amount may be achieved. As soon as you start charging vat to the customers and file regular vat returns then any services rendered by you a foreign company can be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department.

Although following vat rules are not really hard, it is always preferable to choose services of an proficient vat agent that can handle all of 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 previously been paid for services rendered by way of a foreign company within or outside the UK.