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For supplying to vat registered traders it seems sensible to sign up for vat


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If you’re a trader in the UK or 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. It will be possible to pass on vat benefits to the customers while also having the ability to reclaim vat that may have previously been paid in a foreign country.

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

In case your taxable sales cross over the vat threshold limit of ?70,000 in the previous 12 months then you are eligible for vat registration. However, you can also volunteer to obtain registered for vat before crossing the threshold limit too. Vat is an efficient method of taxing goods and services to be able to prevent the problem of double taxation and even create transparency in the tax system. If you’re planning to import services or goods to the UK and then sell them locally then you can also make an application for vat refunds once you turn into the official vat registered trader. You will need to apply at the HM revenue and customs department or hmrc department, which in turn will forward your refund application towards the concerned eu country.

As soon as you sign up for vat with the hmrc department and turn into an official vat registered dealer then you’ll need to issue a vat invoice that’s been specified by hmrc. You will need to mention your vat number, vat rate and vat amount on 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 goods and services with a social impact are usually vat exempt. You will first have to check with regards to which vat rate pertains to each product or service before you begin issuing vat invoices and start charging the applicable rates.

The vat rules in several eu countries which have adopted vat are slightly different and if you plan to import goods from such countries then you need to understand much more than simply what is vat. A professional vat agent with sufficient understanding of customs and excise duties that also knows all about uk vat and eu vat rules ought to be hired for smooth import of goods and services into the UK. As soon as you turn into a vat registered dealer then you will also have to file vat returns at the hmrc specified periods. If you deal in vat exempted goods then 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 for you. However, before you decide to become a part of the vat cycle you need to first sign up for vat so that you too can enjoy all tax benefits offered by this tax system.