Claim reverse charge vat on services where vat has already been paid

If you are a vat registered trader in Britain then you can steer clear of 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 after that cancel it out so that your net cost does not increase.

If you’re 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. Alternatively, you may also have received such services in the UK itself from a 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 linked to land, property, intra EC-freight services, as well as other such services as defined by the HM Revenue and Customs or hmrc department along with the European Community simplification regulations.

If you have a little difficulty in interpreting these vat rules you then should enrol the expertise of a good customs and excise customs vat agent having a wide reach in most eu countries that practise vat. Such an agent www.vatvalidation.com 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 located 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 the UK then you’ll need to calculate and indicate the amount of paid in Box 1 of your vat return form. You will then need to specify the same amount in Box 4 of that return to ensure the amount stands cancelled. You will also need to specify the total quantity 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 any vat paid in the foreign country to sterling before you decide to fill out the amounts in those boxes.

This reverse charge process is also known as tax shift and you can go for such a vat reclaim only if you’re 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 although you may even apply before vat threshold amount may be achieved. As soon as you start charging vat to your customers and file regular vat returns then any services rendered by you from an overseas 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 very difficult, it is usually preferable to choose services of proficient vat agent that can handle all of your vat requirements seamlessly. This will likely enable you to focus on increasing your business while your vat agent files for reverse charge vat and recovers your taxes that have already been taken care of services rendered by a foreign company within and out the UK.