Claim reverse charge vat on services where vat was already paid

If you are a vat registered trader in the UK you’ll be able to 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 are a trader which uses services of foreign companies, especially those situated in vat-friendly eu countries then you may have already paid vat in those countries. On the other hand, you may also have obtained such services in the UK itself from a supplier situated in a eu country. All these factors would end up boosting your expenses since you could end up paying vat on certain services including those linked to land, property, intra EC-freight services, and other such services as defined by the HM Revenue and Customs or hmrc department along with the European Community simplification regulations.

In case you have a bit difficulty in interpreting these vat rules then you should enrol the services of a competent customs and excise customs vat agent having a wide reach practically in most eu countries that practise vat. This kind of agent would surely understand all uk vat and eu vat regulations and may 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 paid for specified services while filing your vat returns itself. If you are in the UK then you will need to calculate and indicate how much paid in Box 1 vatnumbersearch.com of the vat return form. You will then need to specify exactly the same amount in Box 4 of the return so that the amount stands cancelled. You will also have to specify the full quantity of the supply 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 the vat paid in a foreign country to sterling before you decide to fill in the amounts in those boxes.

This reverse charge process can also be known as tax shift and you can go for such a vat reclaim only if you are a vat registered trader in Britain. In order to become a vat registered trader, your taxable sales have to go over ?70,000 in the last 12 months although you can even apply before this vat threshold amount has been achieved. Once you start charging vat to your 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 better to choose services of an proficient vat agent that may 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 which may have previously been taken care of services rendered by a foreign company within or outside the UK.