If you are a vat registered trader in Britain 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 then cancel it out so your net cost does not increase.

If you are a trader which uses services of foreign companies, especially those located in vat-friendly eu countries then you certainly may have already paid vat in those countries. On the other hand, you might also have obtained such services in Britain itself www.vatcheck.com/vat from the supplier situated in a eu country. Every one of these factors would turn out increasing your expenses as you could 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 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 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 been paid to a foreign company situated 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’re in Britain then you will 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 so that the amount stands cancelled. You’ll have to specify the total quantity of the supply in Box 6 and 7 in the vat return form so as to complete your reverse charge vat claim. However, you will have 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 can go for such a vat reclaim only when you’re a vat registered trader in Britain. In order to be 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 an overseas company can be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.

Although following vat rules usually are not really hard, it is usually better to opt for the services of a proficient vat agent that may handle all your vat requirements seamlessly. This will likely enable you to focus on boosting 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 or outside the UK.