Claim reverse charge vat on services where vat was already paid

If you’re a vat registered trader in Britain then you can avoid the problem of double taxation on services utilized from foreign companies when you claim reverse charge vat on services where vat has already been paid. This vat procedure will allow you to first pay vat and after that cancel it 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 certainly may have already paid vat in those countries. On the other hand, you might also www.vatnumbersearch.com have received such services in Britain itself from a supplier situated in a eu country. All these factors would turn out boosting your expenses as you could 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 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 practically in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and may help you to claim reverse charge vat that might have been paid to a foreign company located in another country including a vat-friendly eu country.

You can reclaim vat already paid for specified services while filing your vat returns itself. If you’re in Britain then you’ll have 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’ll need to specify the total 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 any vat paid in a foreign country to sterling before you fill in the amounts in those boxes.

This reverse charge process is also called tax shift and you may go for this type of vat reclaim only if you are a vat registered trader in Britain. In order to become a vat registered trader, your taxable sales need to cross over ?70,000 in the previous 1 year although you may even apply before 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 from hmrc vat department.

Although following vat rules are not really hard, it is always better to opt for the services of a proficient vat agent that can handle all of your vat requirements seamlessly. This will allow you to concentrate on boosting 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 way of a foreign company within and out the UK.