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Claim reverse charge vat on services where vat was already paid


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If you’re a vat registered trader in the UK you’ll be able to avoid 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 then cancel it out so that your net cost doesn’t increase.

If you’re a trader that utilizes services of foreign companies, especially those located in vat-friendly eu countries then you certainly may have already paid vat in those countries. Alternatively, you might also have received such services in the UK itself from the supplier situated in a eu country. Every one of these factors would end up increasing your expenses since 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 http://vatnumbersearch.com regulations.

In case you have a bit difficulty in interpreting these vat rules then you should enrol the services 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 may enable you to claim reverse charge vat that might have already been paid to a foreign company situated in another country together with 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’ll need to calculate and indicate how much paid in Box 1 of the 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 have to specify the full amount of the provision in Box 6 and 7 in the vat return form in order to complete your reverse charge vat claim. However, you will have to convert the currency of the vat paid in the foreign country to sterling before you decide to fill in the amounts in those boxes.

This reverse charge process is also known as tax shift and you may go for such a vat reclaim only if 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 last 1 year while you can even apply before this 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 from a foreign company could 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 usually preferable to choose services of a proficient vat agent that may handle all your vat requirements seamlessly. This will allow 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 taken care of services rendered by a foreign company within or outside the UK.