Pay uk vat to enjoy all benefits offered by this taxation system

If you’re a trader in the UK with rising taxable sales then you need to pay uk vat to relish all benefits offered by this taxation system. As soon as your taxable sales touch the vat threshold limit of ?70,000 in the past vatnumbers 12 months then you’ll need to get vat registration so that you can also end up part of this tax system that’s in force in most European countries.

If you’re a really small trader that mostly sells retail goods then you can remain from the purview of vat or value added tax so long as your taxable sales do not touch ?70,000 in 12 months. However, in case your sales touch that figure or let’s say you sell goods to vat registered traders then you would be better off being a vat registered trader in the United Kingdom. Vat continues to be employed as a means of collecting taxes on goods and services in the majority of of Europe as well as the UK too follows this method. The vat department in the United Kingdom is headed by HM Revenue and Customs or hmrc department.

After you have crossed over the vat threshold limit for uk then you will have to apply for vat registration. That can be done before you reach this limit if you think that you have to reclaim vat that has previously been paid on services and goods, especially in a foreign eu country where this method is followed. You should do the hiring of an experienced vat agent well conversed in uk and eu vat rules for vat registration purposes as well as for filing of vat refunds to ensure that there aren’t any problems in claiming back vat.

Once you do turn into a vat registered trader in the United Kingdom, which could take up to a month once you file a web-based vat application then you will have to charge vat according to the 14,000 services and goods classifications provided by the hmrc vat department. This will have to be done through each vat invoice you will be needed to issue during each taxable sale. UK has 3 vat rates beginning with the regular rate of 17.5%, reduced vat rate of 5%, and the zero vat rate. Certain goods and services are totally vat exempt too.

As soon as you are a vat registered trader in order to pay and collect uk vat determined by vat invoices then you will also have to file your vat returns on a regular basis. Again, your vat agent is going to be required to calculate vat to get paid or refunded based on your vat purchases and sales. In case you have imported goods or services in the UK after paying vat in a eu country then you can definitely avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between four to 8 months after your claim is successfully processed by hmrc as well as the member country. Overall, vat is an excellent tax system to avoid double taxation as well as plug many loopholes which were found in the traditional sales tax system.

If you’re a growing trader in the UK that sells taxable goods to vat registered traders then you will want to maintain the cycle of vat alive by turning into a vat registered trader. Now you can collect and pay uk vat while also claiming any vat previously paid on imported products or services, which in turn will reduce your tax overheads to a large extent.