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

If you’re 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 will allow you to first pay vat and after that cancel it out so your net cost does not increase.

If you are a trader that utilizes 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 obtained such services in Britain itself from the supplier situated in a eu country. Every one of these factors would vat validation turn out boosting 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 lttle bit difficulty in interpreting these vat rules you then should enrol the services of a competent 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 could enable you to claim reverse charge vat that may have already been paid to a foreign company located in another country together with a vat-friendly eu country.

You are able to reclaim vat already covered specified services while filing your vat returns itself. If you’re in Britain then you will have to calculate and indicate the amount of paid in Box 1 of your vat return form. You’ll then need to specify exactly the same amount in Box 4 of that return so that the amount stands cancelled. You’ll need to specify the total amount of the provision in Box 6 and 7 of the vat return form in order to complete your reverse charge vat claim. However, you will need to convert the currency of any 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 may go for such a vat reclaim only if you are a vat registered trader in the UK. In order to be a vat registered trader, your taxable sales need to cross over ?70,000 in the previous 12 months although you can even apply before this vat threshold amount has been 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 could be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.

Although following vat rules are not very difficult, it is always preferable to choose services of an proficient vat agent that can handle all your vat requirements seamlessly. This will enable you to concentrate on increasing your business while your vat agent files for reverse charge vat and recovers your taxes that have previously been paid for services rendered by a foreign company within and out the UK.