Most eu countries have adopted the system of VAT or value added tax so as to create a single market and if you are a vat registered trader in such a country then filing timely vat returns can help you to focus on your business. A vat return is a summary of vat tax collected and paid within a certain period and you can now pay excess vat collected or claim excess vat paid from your country’s vat department.
If you are a trader based in the UK, and have just received your vat registration then you will now need to follow all vat rules established by Her Majesty’s Revenue and Customs or hmrc. While you would need to issue vat invoices that mention your vat number, vat rates against each product or service, and the gross amount of vat, you would also need to maintain a record of the same. All your vat invoices issued in a particular period along with your purchase invoices would need to be totalled up along with the vat amounts collected during sales and paid during purchases. This data would form the core of your vat returns that you submit to hmrc.
You might have to submit your vat return on a monthly, quarterly or yearly basis based on your sales turnover and the vat accounting system that you choose. If you have received your vat certificate after April 01, 2010 then you will only be allowed to file online returns, irrespective of your turnover. However, for older vat registered traders, the threshold limit of filing returns online is when their sales turnover excluding vat crosses £100,000 although such dealers can still file them online if they wish even if they have not yet reached that figure. Filing vat returns online is a better option since you need not worry about lost or delayed returns and can also fill and dispatch your returns to hmrc at the click of a button. Several other eu countries also offer such online features to its traders.
You can keep a printout of your vat return once you submit it to hmrc or can even view past returns filed after November, 2009. However, you will first need to register at the hmrc website so as to activate all vat online services offered by them. In addition to filing vat returns you can also view all vat rules and also file for vat refunds at the website. You can also register your vat agent to represent you while filing returns or apply for vat reclaim on your behalf. Once you are registered then it is very easy to file your returns online although you should remember to fill up each box of the vat return form no. 100 or 193, and that too well before the due date. You will be able to avoid penalties as well as remain in the good books of hmrc if you always file your returns on time.
Turning into a vat registered trader in the UK involves maintaining proper vat records and providing regular summaries to the hmrc while also paying excess tax at the same time. This is done by filing vat returns in the time-frame specified by hmrc, and filing timely returns will help you to focus on your business instead of worrying about penalties or possible vat audits in the future.