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

If you’re a trader in the United Kingdom or any other EU country that has adopted or value added tax as a way of collecting taxes then for supplying vat registered traders it makes sense to sign up for vat. You will be able to pass on vat benefits to your customers whilst having the ability to reclaim vat that might have previously been paid in a foreign country.

In the United Kingdom you can register as being a vat registered trader irrespective of whether you’re an individual operating a business, a partnership, a club, an organization, an association, or any other kind of organisation. Basically, if you are dealing in goods or services that attract vat then you can get registered for vat. Additionally, if your main clients are vat registered dealers it definitely makes sense for you to continue the vat tax chain and turn into a vat registered dealer.

If your taxable sales go over the vat threshold limit of ?70,000 in the previous 12 months then you are entitled to vat registration. However, you can even 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 and even bring about transparency in the tax system. If you’re planning to import goods or services to the UK and then sell them locally you’ll be able to also apply for vat refunds as soon as you turn into an official vat registered trader. You will have to apply at the HM revenue and customs department or the hmrc department, which in turn will forward your refund application to the concerned eu country.

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

The vat rules in different eu countries that have adopted vat are slightly different and if you intend to import goods from such countries then you will want to understand much more than merely what is vat. A professional vat agent with sufficient knowledge of customs and excise duties that also knows information about uk vat and eu vat rules ought to be hired for smooth import of goods and services to the UK. As soon as you turn into a vat registered dealer then you’ll definitely also have to file vat returns at the hmrc specified periods. If you deal in vat exempted goods you will be unable to claim any vat refunds.

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