Filing timely vat returns can help you to focus on your business

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.

Apply for vat registration after crossing vat registration threshold

If you are a trader in the UK then you will need to apply for vat registration after crossing vat registration threshold limit set up by Her Majesty’s Revenue and Customs or hmrc department. Once you turn into a vat registered trader then you will need to follow specific vat rules laid down by hmrc vat.

Although almost all eu countries including the UK, Poland, Italy, Germany, Greece, Sweden, etc have adopted vat or value added tax to boost tax revenues and minimize tax losses, each country has set its own vat threshold after which a trader has to enter the system of vat. In the UK this threshold limit is achieved once your taxable sales in the previous 12 months have touched £70,000 or if you expect this figure to be touched within the next 30 days. In case you take over a business that is not vat registered and the combined taxable sales of your own business along with the new business cross over the vat threshold limit then you will have to go in for vat registration.

Even if you import goods from other eu countries that cross over the threshold limit or export goods to other countries above that limit then you will still need to get vat registration and turn into a vat registered trader. If, however, you have temporarily crossed over the vat threshold limit and do not expect to cross over the limit again then you can be granted temporary exemption provided you can convince hmrc that your taxable sales will drop below the de-registration limit of £68,000 in future.

However, you should remember that since the standard vat rates are slated to change from 17.5% to 20% from January 4, 2011, the vat registration threshold too will be changed accordingly. You will need to keep in touch with hmrc or consult an expert vat agent to find out the new limit, especially if you foresee your taxable sales touching the threshold limit by the start of next year. In case you feel that you need to get your vat certificate immediately after starting your business and want to issue vat invoices to your clients then you need not wait to touch the threshold limit at all and can even apply for vat registration once you start your new business.

There are several other conditions whereby you can get included or excluded from VAT registration and your vat agent could guide you ahead depending on the conditions under which you run your specific business. If you turn into a vat registered trader then this would enable you to enjoy all benefits offered by vat such as applying for vat reclaim or vat refund. You will also need to follow all uk vat laws, issue vat invoices, file regular vat returns and maintain all required vat documents once you get your vat certificate and vat number. However, if you try to avoid vat registration by splitting up a single business into smaller businesses then you might even attract a penalty in case hmrc concludes that you have done so simply to avoid entering into the system of vat.

You will need to keep an eye on your taxable sales if you have started a new business and also on the vat threshold limit at the start of next year so as to confirm your entry into the system of vat. Once you achieve the vat registration threshold limit set up by hmrc then you will need to fill up the applicable vat registration form to turn into a vat registered trader in the UK.

Submit vat registration form to turn into a vat registered trader

If you want to get a vat certificate and issue vat invoices then you will first need to submit the applicable vat registration form to turn into a vat registered trader. Vat or value added tax is applied on goods and services sold in most eu countries including the UK.

It is the European Commission that has specified eu vat rules that need to be followed by all vat-abiding eu countries including the UK, Sweden, Greece, Portugal, Spain, Germany, Poland, etc. Although each country has made subtle interpretations of these vat rules, in principle, each eu country has adopted them to enable easier cross-border flow of goods and services, and also as a means to enhance tax collections. If you are a trader in the UK then you can either directly opt for vat registration once you start your own business or wait until you reach the vat threshold limit of £70,000 in taxable sales in the previous 12 months, in which case it is mandatory for you to turn into a vat registered trader.

However, since Her Majesty’s Revenue and Customs or hmrc vat department has shifted most operations online, you would need to equip your business with an internet-enabled computer, if you have not done so until now. You should also hire an expert vat agent to help you with the vat registration process while also helping you submit your vat returns and vat refunds in future. You should also learn on how to use all vat online services that are on offer by hmrc vat as well as visit their website regularly to keep in touch with the latest updates. For example, the standard vat rates in the UK are poised to rise from the current 17.5% to 20% from January 4, 2011, and vat threshold limits too are poised to change accordingly.

You can easily locate the applicable VAT registration form on the website of hmrc, namely hmrc.gov.uk. If you are in any other eu country that follows vat then a simple search over any popular search engine will allow you to locate the vat department of your country. As regards to the UK, you can simply download any vat form that you wish on to your computer including the registration form. If you are an individual that is running your own business then you can just fill up the VAT 1 registration form online and submit it to hmrc, of course with the help of your vat agent.

All other registration forms as regards to a partnership firm, charitable trust, club, distance selling businesses, or any other organizations can be downloaded to your computer but you will need to print it at your end and submit it by return post after filling up the same. Hmrc might also ask for other details regarding your business, if required and you can expect the vat registration process to be completed within a month after you file for registration. Based on the size of your business and advice from your vat agent, you can also choose the type of vat accounting scheme that is most suited for your business.

Registering for vat is the first step that you will need to take if you want to receive your vat certificate and issue vat invoices with your vat number. The process itself is very simple in the UK where hmrc has taken most services online. All you need to do is to hire an expert vat agent and submit vat registration form to turn into a vat registered trader so that you can quickly start out in the world of vat.

Conduct vat registration check to deal with genuine businesses

If you have turned into a VAT registered trader in any eu country that levies vat including the UK then you would need to submit vat invoices of your suppliers for successful vat refunds and you will surely need to conduct vat registration check to deal with genuine businesses. However, if the vat numbers of your suppliers turn out to be incorrect then it would adversely affect your chances of receiving a vat refund and you could also get penalized in the process.

It is anyway quite easy to check vat registration numbers of any vat registered business situated in the UK or in fact any other eu country that has adopted the system of value added tax. This could be very crucial if you plan to import goods into the UK where you might be a vat registered trader and plan to apply for vat refunds for vat already paid on those goods. In such a case you might find yourself in deep trouble if the vat number printed on the vat invoice of your supplier or vendor turns out to be bogus or an expired one.

If a dubious supplier has provided you with a fake registration number then you might find out the truth only when you try for a vat reclaim on goods or services imported by you in the UK. This would result in your vat refund application being rejected as well as ending up on the wrong side of HM Revenue and Customs or hmrc that looks after customs, excise and vat duties in the UK. Each future vat refund application submitted by you will now be looked at with grave suspicion for no fault of yours except for the fact that you forgot to conduct a vat registration check before importing goods or services into your country.

You can easily visit the website of the European Commission that handles all eu vat issues that govern all eu countries that follow vat. You can use this link to directly end up at the registration checking section of Europa: http://ec.europa.eu/taxation_customs/vies/vieshome.do?selectedLanguage=EN. You will need to mention the complete vat number including the member state name, which usually is mentioned in the first two characters. You will also need to submit your own vat number along with your state code and will receive the results within seconds.

Alternatively you can also call up the hmrc office number if you are a vat registered trader in the UK. The phone number is 0845 010 9000 and you can call during office hours to again find out the validity of any vat registration number within seconds. You can continue with the deal only when you are convinced that the opposite party is truly a genuine vat registered trader in that country. Since vat refunds take a long time to materialize it is always better to take precautions instead of being shocked after a few months after filing for a vat refund, by which time the dubious supplier might have changed the business name or address.

It is always better to check the vat registration number of any supplier or vendor before you start doing business with that firm. Since any loss of refund or penalty arising out of a bogus or expired vat number will have to be borne by you, it is in your interests to conduct vat registration check so that you end up dealing only with genuine businesses.

Get vat training to take complete advantage of vat

Vat offers you a chance to pay taxes on goods and services in a transparent manner while also offering you a chance to claim back excess VAT paid, and you should get vat training to take complete advantage of vat. If you do not know what is vat then a short training course can help you learn about the basics of vat while advanced training modules could help you in case you need to reclaim large amounts of vat from various eu countries.

If you have sufficient knowledge on how to use a computer and access the internet then you can visit the eu website ec.europa.eu or if your business is based in the UK that has also adopted vat then you can visit hmrc.gov.uk. You can find a lot of useful information pertaining to vat at these websites. However, you might also get confused if you are new to the system of vat.

In such a case, it would make more sense to receive a little training on all aspects of vat from professionals that have years of experience and know all eu vat and uk vat rules in great detail. Since hmrc or Her Majesty’s Revenue and Customs that enforces vat in the UK can penalize you on mistakes committed by you, it is imperative that you at least understand all facets of vat that are related to your industry or business before you turn into a vat registered trader in the UK.

You can seek out vat training seminars or workshops organized by vat professionals that could teach you the basics or vat or could even turn you into an expert in vat, depending on the course that you choose. The course could last for only a few hours or could stretch for a couple of days depending on the level of knowledge that you wish to acquire. Some experts also hand out free books on vat along with free newsletters for a particular period once you sign up for training. In addition you might also receive refreshments such as tea, coffee and biscuits during the course of your training.

Your training course might provide you with knowledge on various facets of vat such as vat classifications of various goods and services, applying for vat registration, calculating vat rates, preparing vat invoices, filing of vat returns, and applying for vat reclaim or vat refunds. If you plan to import goods into the UK where vat has already been paid on the same in another eu country then this vat training could be very useful since vat refunds would enable you to lower your costs while improving the cash-flow of your business. Even if you do hire an efficient vat agent to handle all paperwork related to vat, it still makes good business sense to learn all that you can about vat so as to save the maximum amount of money while following all applicable vat rules without any problem.

If you are on the vat threshold of turning into a vat registered trader in the UK then you should first acquire all possible knowledge on vat accounting procedures so that you can seamlessly move your business into the system of vat. You should make it a point to get vat training to take complete advantage of vat so as to keep your business costs at optimum levels.

Use appropriate vat registering forms to become a vat registered trader

If you want to start out in the business world as a VAT registered trader or have touched the vat threshold limit in your country then you should use appropriate vat registering forms to become a vat registered trader. Each eu country that has adopted vat has specific vat registration forms that need to be filled up before you can turn into a vat registered trader in that country.

The European Commission that oversees vat in countries such as the UK, Spain, Belgium, Portugal, Denmark, Sweden, Lithuania, etc has issued eu vat guidelines that need to be followed by all countries that have adopted vat. This includes the UK where it is Her Majesty’s Revenue and Customs department that looks after all vat, customs and excise duty collections, and enforcement of all vat rules. The hmrc as it is also called has its own website hmrc.gov.uk that explains each aspect of vat in great detail while also allowing visitors to download vital vat forms including vat registration forms.

If you are new to the system of vat or if you simply want to start out without committing an error then hiring an efficient vat agent should be your first step that should be taken even before you apply for vat registration. Your agent can guide you through the vat registering process so that you end up with your vat certificate and vat number within the shortest possible time, i.e. usually within a month. You vat agent can also help you by calculating vat rates on your goods and services, filing of vat returns and also applying and tracking vat refunds that usually take several months to materialize.

You can register online for vat as an individual business at the hmrc website by filling up Vat Form 1, if possible with the help of your vat agent. However, if you want to register as a company, a charity, a club, an association or any other organization or institution then you will only be able to download the corresponding vat registration form and will need to post it to the appropriate vat office. The hmrc vat department might also ask for additional details if required by them before they process your application. However, once your application is successfully processed then you will be given a vat certificate that mentions your vat number that will need to be displayed in all vat invoices, vat returns and all other vat documents.

Once you register for vat and receive your vat no then you will have to start charging vat to your customers based on vat classifications made by hmrc on all goods and services. You will also need to file regular vat returns while your vat agent can also help you to file for vat refunds on goods or services imported from any other eu country where vat has been already collected by vat authorities. There are also several other vat online services that can be availed by you and your vat agent on the hmrc website and if you are not computer or internet savvy then now is the right time to acquire a few online skills.

It is important that you learn the basics of all uk vat rules if you are on the verge of turning into a vat registered trader in the UK. However, before you enter into the vat system of the UK or any other eu country you should use appropriate vat registering forms to become a vat registered trader.

Follow all vat rules to enjoy all benefits of vat

If you have just turned into a VAT registered trader in any eu country that follows the system of vat or value added tax then you should follow all vat rules to enjoy all benefits of vat. Vat is essentially a consumption tax that is based on a fixed percentage of each taxable sale that you make and is ultimately borne by the end-consumer or customer.

Although vat was established in 1967, it was only in 1977 that the first set of uniform vat directives were issued to all eu member countries that had shifted over to this system of taxation. In 2007, a recast of the sixth vat directive was fine-tuned and issued again simply as the Vat directive, which made it easier for member countries to adapt to the mission of creating a single market within the entire European Union while also boosting tax revenues for respective governments.

Each country has to follow eu vat rules although they do have some flexibility in interpreting those rules to suit their own country. These rules specify that each member country needs to set the standard vat rate at a minimum of 15% and a maximum of 25%, and one or two reduced vat rates at 5%. However, some countries such as Ireland and the UK also have a zero vat rate. Each country usually also has its own vat threshold limit that ushers in a trader into the system of vat once taxable sales of that trader crosses that limit.

Although each country has different vat rates, the mode of applying vat on goods and services is still the same. Each vat registered trader has to issue a pre-formatted form of invoice known as a vat invoice that has to specify the goods or services sold along with the percentage of vat applicable on each product or services, along with corresponding vat rates and the final vat amount. The invoice also has to mention the vat number of the seller and in some cases even the vat number of the buyer, especially if the vat chain needs to be continued. Vat invoices are known by different names in various countries. For example, in Poland each trader needs to issue a faktura invoice, which is basically the same as a vat invoice issued by a trader in the UK.

You will also need to follow your own country’s vat rules while filing vat returns at the required periods, i.e. monthly, quarterly or yearly. You might also have to file a final vat return at the end of each accounting year. You will also have to follow these rules while filing for vat refunds on vat already paid in another country before being imported into your own country. If you are a trader in the UK then you will firstly need to follow uk vat while also adhering to eu vat at the same time. You could employ a vat accountant or agent to ensure that you do not break any rules.

The system of vat ensures transparency in sales while also allowing you to calculate the exact tax component in your business. This will help you to calculate your profits accurately while offering a better deal to your customers at the same time. However, in order to enjoy all benefits offered by the system of vat you will also need to follow all vat rules issued by the European Commission as well as your own country.

Before you start charging vat register for turning into a registered trader

If your country has adopted vat or value added tax and you want your business to become part of the VAT system then before you start charging vat register for turning into a registered trader. Once you turn into a vat registered trader in your country then you can simply follow all applicable vat rules to collect vat, file vat returns and even apply for vat refunds.

Most European countries including Sweden, Germany, Spain, Poland, Portugal, Greece, and the UK among several others now use vat as a common system of collecting taxes on goods and services in their own countries as well as for ease of calculating taxes on cross-border trade between such countries. If your business is situated in the UK then you can either apply for vat registration immediately on starting your new business or wait until you touch the vat threshold limit of £70,000 in the past 12 months before you anyway need to register for vat.

In the UK, it is hmrc vat or HM Revenue and Customs vat that handle all vat-related matters by issuing uk vat rules that need to be followed by all businesses. You too will need to follow these rules during the vat registering process so that your transformation into a vat registered trader is swift and seamless. The hmrc vat department has gone online and you will need to visit their official website hmrc.gov.uk to look at their registering process as well as download the applicable vat form to apply for vat registration.

You can get registered as a vat trader as an individual running a business, a partnership, a company, a club, a charity, an association, or even as an institution or organization provided you meet all vat rules issued by hmrc vat. In case you are an individual running your own business then you will need to simply fill up an online vat form and submit it to hmrc. This is the easiest method to apply for vat registration since all other vat register forms can be downloaded by you but will need to be printed and filled up manually before you post it to the appropriate vat office in the UK, Northern Ireland or the Isle of Man.

However, if you only sell vat exempt goods or services then you need not register for vat. However, if you take over an existing business and the combined sales of both businesses go over the vat threshold limit then you will surely need to register for vat registration. You will normally turn into a vat registered trader within a month of filing for vat registration if all data provided by you satisfies hmrc. You will now be issued with a vat certificate and a distinctive vat number that will need to be displayed on each vat invoice that you issue. You will also need to file regular vat returns based on the vat accounting scheme that you choose. In case you import goods or services into the UK where vat has already been paid for the same then as a vat registered trader, you will also be able to claim for vat refunds by following the required procedure.

Most eu countries have eu vat rules that are quite similar to uk vat rules when it comes to turning into a vat registered trader in that country. You should hire a capable vat consultant or agent so that your journey into the world of vat proceeds seamlessly and your vat refunds are also processed quickly. However, before you start charging vat register for turning into a registered trader by logging in at the hmrc website and seek out the right vat form for registration.

Use the vat reclaiming process to receive vat back into your account

Once you turn into a vat registered trader in the UK or in any other vat-enabled eu country then you can reap the benefits offered by vat rules once you use the vat reclaiming process to receive vat back into your account for vat already paid on goods or services. These goods or services, however, have to be used for your business only and they include vat amounts paid in another eu country too.

In these days of tough competition, paying vat twice on goods or services can effectively knock you out of the competition. The fact that paying vat twice affects your cash flow negatively should also be considered and you should certainly opt to fill out the online vat form to apply for reclaiming vat even though that amount might land up in your bank account after 4 to 8 months of filing an application. The vat refunds could certainly be huge if you import goods from another eu country or pay vat on trade shows organized in those countries.

You need not monitor the status of your vat refund application on a daily basis anyway since you can simply empower your vat agent to file and monitor vat reclaims on your behalf. You will first need to get registered with HM Revenue and Customs or hmrc in the UK before you can use any of their vat online services that include vat registration applications, vat returns and vat refunds. You cannot deduct the vat amount from the next vat return for vat paid in foreign countries but instead need to apply for reclaiming vat by providing specific vat invoice details that show the amount that you have already paid even if it is in another eu country such as Greece, Sweden, Poland, Germany, etc.

On its part, hmrc vat will forward your vat reclaiming request to the country mentioned in your application. That country’s vat department might process your vat application within 4 months and proceed to refund you the vat amount in their currency in your bank account, or ask for additional information that might delay your vat reclaim by another 4 months. Your vat agent will be ready to file and follow-up on each vat refund application usually in exchange for a cut in the vat amount that you receive in your bank account, which can be considered fair since you need not pay your vat agent in advance or ignore your business to chase after vat refunds.

However, if you want to claim vat paid on local goods or services that have been used for your business then the process is quite different and you will need to visit the hmrc vat website to find out the exact procedure and amount that can be reclaimed against capital goods or input tax paid on goods or services. Your vat reclaim will also depend on the VAT accounting scheme that you have chosen to follow since some schemes do not allow for vat refunds.

Your business might suffer a double-blow if you end up paying vat twice over the same goods or services. You need the services of an expert and experienced vat agent to guide you through the vat reclaiming process so that your business gets regular vat refunds on vat that has already been paid locally or in a eu country that also follows the system of vat.

Study vat on services in your country and other eu countries

If you are a vat registered trade in any eu country including the UK then you certainly need to study VAT on services in your country and other eu countries so that you can charge the applicable vat rate as well as make proper vat reclaims for vat paid. The eu vat and uk vat rules are quite complex, and you need to fully understand them if you do not want to end up paying vat on services without charging your clients or forget to reclaim vat already paid on certain services.

EU vat rules issued as directives by the European Commission usually differentiate between vat applicable on services provided to taxable persons engaged in businesses and non-taxable persons such as individuals that utilize such services for personal use only. In such cases where the customer is a business then vat must be charged at the customer’s place of address or in the customer’s country. On the other hand wherever services are supplied to private individuals then vat will have to be charged in the supplier’s country. However, there are also several exemptions to these rules and if you are in any doubt then you should get them cleared through your vat agent or consultant since your business can certainly benefit if you can reclaim vat already paid on services in another eu country where vat is followed.

If your vat registered business is located in the UK then you will need to adhere to uk vat rules issued by hmrc to ensure that vat on services are paid, collected and reclaimed safely. Hmrc lays a lot of emphasis on place of supply to establish the correct rate of vat on such services. For example, if your business is located in the UK but the services are supplied to another eu country that follows vat then that supply falls outside the purview of vat in the UK, i.e. no vat needs to be charged in the UK. You will still need to inquire with the country where those services have been supplied to find out if you need to pay vat in that eu country. However, if that service is provided to a customer in any other country that is not in the European Union then you will not have to charge any eu vat nor will you need to include that particular sale in your vat return.

However, for services supplied within the UK itself, there are several vat classifications issued by hmrc vat that specifies on whether you need to charge the standard rate of vat at 17.5%, reduced vat rate of 5%, or zero vat rate, depending on the services offered by your business. There are also certain services that are vat exempt or fall outside the purview of vat, where usually you cannot claim any vat back. You can visit the website of hmrc.gov.uk to find out about these classifications and exemptions so that you do not end up over-charging or under-charging your customers or run afoul of prescribed vat rules.

If your business is located in the UK and you need to provide or utilize services outside the UK or even within the UK then there are several vat rules applicable on such services. You will need to study vat on services in your country and other eu countries in great detail, and also enlist the help of an expert vat agent so that you pay and collect vat without violating any uk or eu vat rules.