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.

Validate vat numbers for peace of mind

If you do not want to get a rude shock and get penalized for dealing with a company that has provided you with an incorrect VAT number then you should validate vat numbers for peace of mind. The process is quite easy and totally free if you use the internet and you can easily check any vat number within minutes.

Any trader that gets vat registration after touching the vat threshold figure of that particular country gets a unique vat number. Most European Union countries including the UK have adopted vat and if you are a vat registered trader in the UK then you too would have your own vat no. If you plan to purchase goods or utilize services from another vat registered trader within the UK or even import goods from another eu country then you should do so only from a vat registered trader. This will help you to reclaim any vat previously paid on those goods or services, although this move will succeed only if the vat number provided to you by your supplier is genuine.

Many traders that are not vat registered in their own country try to pass on fake or expired vat numbers to their clients in a bid to generate more sales. The problem is that if you fall victim to such sales then you are sure to face serious problems including penalties when you try to go in for vat refunds based on your supplier’s vat invoice that sports an incorrect or fake vat number. If you plan to import goods into the UK from another eu country then the problem would be more acute since you would need a lot of time and money to pursue the matter and get justice.

However, there exists an easy solution to this problem. You can simply call up the office of HM Revenue and Customs or hmrc that implements all customs and excise customs vat laws in the UK. The phone number is 0845 010 9000 and you can validate the vat number by calling between Monday to Friday, 8.00am to 8.00pm. On the other hand, you can simply go online to visit the hmrc vat website or ec.europa.eu that is the official website of the European Union that oversees eu vat all over Europe. You will need to type in the country code of your supplier followed by the 11 or 12 digit vat number as provided to you by your supplier before you place any order on that supplier. Once you have confirmed that the vat number is genuine and valid on the date of checking the number, you can even take a printout to confirm the validation, before happily placing your order.

In order to maintain vat records, file vat returns and vat refunds for vat already paid on certain goods and services, hiring a capable vat agent would surely be the best possible step. This will enable you to focus on increasing your business while your vat agent takes care of paying and recovering your taxes. Your vat agent should be an expert in eu and uk vat law so that there are no mistakes committed that could come back to haunt you in the future. Your vat agent can also check if new vat registration numbers provided by your suppliers are genuine.

In order to only deal with genuine vat registered traders it is vital that you check if the number provided by any new dealer is indeed valid. This move will ensure that your vat reclaim application is not rejected due to false or invalid vat number of your supplier. You should certainly validate vat numbers for peace of mind while filtering out unscrupulous traders that are only out to make a fast buck at your expense.

Performing vat online registration is simple and convenient

If you want to or need to turn into a VAT registered trader in the UK or even in most other vat-enabled eu countries then performing vat online registration is simple and convenient. You can also remain free from worrying about whether your documents have reached safely by post and can submit your application on a 24/7 basis.

Most eu countries that follow the system of value added tax or vat follow rules established by the European Commission. These eu vat rules are interpreted by each eu country and even converted into their own local language before being implemented. In the UK it is hmrc or HM Revenue and Customs that have interpreted these vat rules so as to help traders to register for vat and also guide them ahead once they turn into vat registered traders.

If you are one such trader that wants to get registered immediately since your clients demand vat certification to apply for vat reclaim then you will need to do so once your new business starts trading. Anyway, once your taxable sales reach the vat threshold limit of £70,000 in taxable sales in the past 12 months as imposed by hmrc vat department then you will have to apply for vat registration and get your own vat number that will need to be displayed on all vat documents including your vat invoice, vat return and vat refund application.

Hmrc has made it very convenient for you to apply for vat registration online and you simply need to visit their website hmrc.co.uk to kick-start your process into the world of vat. You should, however, first employ an efficient vat consultant or agent that can take care of all aspects related to vat since you will not find it easy to rectify any mistakes and might even get penalized. If you run a small business all by yourself then you can easily fill up the applicable vat online registration form over the internet and submit it to hmrc instantly thus avoiding any postal delays or incurring postal costs.

However, if your business is a partnership or part of a group, or a charitable organization, among other forms of businesses then you will need to download the applicable vat form for registration. You can then print the form and then fill it up before sending it back to hmrc vat by post. Once you apply for vat registration then hmrc will send you a questionnaire within 15 days that will ask for other details such as your address, bank account numbers, telephone and fax numbers, etc. If hmrc is satisfied with all details provided by you then you will normally receive your vat registration number and certificate within a month.

In addition to online registration, hmrc also offers several other vat online services to save your precious time and money. All your vat returns will have to be filed online and you can also apply for vat refunds online for vat already paid on certain goods and services, even if they have been paid in another vat enabled eu country. You should make sure that you get acquainted with your computer and the internet since you can easily find out more about all aspects of vat by visiting the hmrc website.

Getting registered for vat is your first step into the world of vat and once you do turn into a vat registered trader in the UK then you will need to follow all uk vat rules to ensure that your business prospers without a tax hitch. Performing vat online registration is simple and convenient, and a little computer knowledge along with a capable vat agent will ensure that you take a safe first step into the world of vat.

Conduct a vat number check before entering into any vat deal

If you are planning to enter into any deal that involves VAT or value added tax, especially with traders based in another eu country then you should conduct a vat number check before entering into that deal. This facility is available online as well as by phone and can help you avoid a lot of problems with the vat department in the coming days.

If you are a trader based in the UK where the system of vat is followed, and wish to import goods into the UK from another eu country that also follows vat then buying those goods from a vat registered trader in that country would lead to several benefits. You could go in for a vat reclaim in the original country if vat has already been paid in that country. However, there are chances that an exporter might provide you with a wrong vat number by mistake. On the other hand, an unscrupulous trader might simply provide you with a fraudulent vat number or a vat number that has already expired or been cancelled simply to get additional business.

It is always better to check the vat number of any potential supplier before you place an order since once the goods arrive in the UK and you try to reclaim vat then you might find out the ugly and costly truth. In addition, HM Revenue and Customs or hmrc that handles all customs and excise customs vat duties in the UK might not take too kindly to imports that take place on a fraudulent vat number. Thus, a vat number check should be your top priority to confirm if the number given to you by your supplier is indeed correct and valid at the time of import.

There are several countries in the European Union that follow vat including Germany, Spain, Italy, Poland, Portugal, Sweden, the UK, Latvia, etc. The vat number of each trader begins with a 2 letter country code such as DE for Germany, GB for the UK, SE for Sweden, etc. This is usually followed by a 12 digit number or an alphanumeric number. Certain countries such as the UK also have spaces between blocks of numbers. You will need to visit the hmrc vat website or can directly visit the European Union website ec.europa.eu and feed in the vat no. of your proposed supplier to find out the facts.

The EUROPA website links to the vat department of the mentioned country and provides you with details on whether the vat number is correct and valid on that particular date. You can also take out a printout of the result so as to have documentary proof in your hands. If you do not have an internet connection then you can also call up the hmrc vat office at 0845 010 9000 between 8 am and 8 pm, Monday to Friday to confirm the validity of the vat number over the phone.

It is important to cross-check the vat number of any new supplier especially while importing goods since any number that turns out to be a fake when you try to indulge in vat refunds could make you liable for penalties. It is also very easy to conduct a vat number check over the telephone or internet and you should certainly make full use of this facility to ensure that you are dealing with a genuine supplier.

For matters related to vat all roads lead to the nearest vat office

If you need to apply for vat registration or if you are a vat registered trader, or need any information on vat in any eu country including the UK where vat is applied, then for matters related to vat all roads lead to the nearest vat office. In the UK it is Her Majesty’s Revenue and Customs department or hmrc that can guide you on all matters related to vat.

Similar to the UK, other eu countries such as Sweden, Portugal, Spain, Germany, Italy, etc too have various local and central vat offices that implement vat rules in their respective countries. These offices also track taxable sales of each trader in their country so that they can be monitored even more closely once they turn into vat registered traders. In the UK, the vat threshold limit to turn into a vat registered trader is achieving taxable sales of £70,000 in the past 12 months. Once you touch these figures then you will surely need to locate the nearest vat office to start your vat registration process.

In the UK, the hmrc vat department even offers a virtual office over the internet so that you do not need to travel each time you need to ask a query or file future vat returns. The hmrc website hmrc.gov.uk offers several vat online facilities that is sure to save your time, effort and money. If you run a small business single-handedly then you can easily fill up the applicable vat form online for registration and submit it to the vat department. In case your business is a partnership concern, part of a larger group, or even a charitable organization, among others then you can download the applicable application form but will need to send it by post to the corresponding vat office as mentioned in their website.

Hmrc has several offices spread out throughout the UK and notably amongst them are the ones located in Grimsby, Wolverhampton, and even in Aberdeen, Scotland where uk VAT rules are applicable. You should ensure that you hire an expert vat agent or consultant so that your transformation from a regular trader to a vat registered one, and filing of all your vat returns and vat refunds are done as per the required procedure and that too within the stipulated time frame. Other countries in the European Union too follow their version of eu vat rules and also have various offices to cater to their vat registered traders.

You can also visit the virtual office of hmrc to find out more about vat accounting schemes that might best suit your business model. For instance, if you are a small trader that does not want to be burdened by excessive documentation, then you can easily opt for the flat vat rate scheme. You should also follow proper vat accounting procedures based on the scheme that you have chosen since any genuine or willful mistake would be rewarded with a vat audit by vat officers or a call to visit the concerned hmrc office.

For all your vat related needs in the UK you can depend on the nearest hmrc office that can help you solve queries while also accepting all related forms and applications. The hmrc vat website also offers a virtual office that can accept vat returns and applications for vat refunds, thus saving valuable time in the process. For matters related to vat all roads lead to the nearest vat office and you should ensure that all your queries are solved at the physical or virtual office without any delay.

Follow vat invoicing norms set by the vat department

Once you turn into a VAT registered trader in any country that has adopted the system of vat or value added tax then you need to follow vat invoicing norms set by the vat department of that country. If you are a trader with vat registration in the UK then you need to follow norms issued by Her Majesty’s Revenue and Customs department or hmrc, which in turn follows eu vat rules set by the European Commission that acts as a guide for all eu countries that follow vat.

Vat has become increasingly popular among eu countries since it allows for increased tax collection with fewer loopholes through which traders can evade such taxes. The European Commission has also laid down guidelines regarding all aspects of vat including issuing of vat invoices and filing for vat refunds for vat paid in another country, among several others. The invoicing norms laid down by hmrc vat department ensures that your tax invoice mention all details regarding vat charged so that filing of vat returns becomes easier. Such invoices can also be cross-checked by a sudden vat audit conducted by hmrc vat officers who can immediately scrutinize the vat amounts charged on each invoice.

Your vat invoice will need to declare your vat registration number, your company’s name, address and invoice number that will need to be in sequence to previous invoice numbers. In addition to your vat number and other details, your invoice will also need to mention the type of goods or services sold along with the percentage of vat applicable on each of those goods or services. You will also need to mention vat rates and amounts based on your calculations. Finally, you will need to mention the total amount of that invoice including vat. Such a system of vat invoicing is followed in all eu countries that follow vat.

If you follow the standard vat accounting method then the vat details in these invoices will also help you while filing of vat returns since it will allow you to calculate the sum of vat paid and collected during a particular month, quarter or year depending on the period of filing your vat returns. If you have chosen the vat flat rate of accounting then these invoicing norms will not apply to you although you will still need to mention the vat amounts in your invoice.

If you have imported goods into the UK from another eu country where you have already paid vat then based on the vat invoices of that country, you can easily find out the amount of vat paid there and apply for a vat reclaim on that amount so as to avoid the problem of double-taxation. Anyway, it will be better if you hire an expert vat consultant or agent that can guide you on how to prepare your vat invoices, file your vat returns and apply for vat refunds. The hmrc website too does its part in educating vat registered traders on how to prepare vat invoices by displaying samples of such invoices on its site.

Once you turn into a vat registered trader in the UK or any other eu country that has embraced the system of vat tax then you need to follow all vat rules, directives and amendments issued by the European Commission and respective countries. You should certainly follow vat invoicing norms set by the vat department so as to remain on the right side of the law as well as make it easy for you to extract vital vat data from your invoices whenever you need to do so.

All eu countries have vat exemption rules for specific goods and services

Most eu countries have shifted over to VAT or value added tax as a means of collecting taxes on goods and services, and all these eu countries have vat exemption rules for specific goods and services. This means that certain goods and services, especially those related to charities, health and education usually are totally exempt from payment or collection of any vat.

The European Commission that overseas all vat issues in eu countries such as Poland, Greece, Spain, Sweden, Portugal, the UK, Germany, Italy, Ireland, etc has issued several directives on the common path that needs to be followed to successfully implement and monitor the system of vat tax in each country. Such rules also help in easing imports and exports since vat rules between member eu countries are quite clear. However, most eu countries have set their own standard vat rates that range between 15 and 25% as per EC recommendations. On the other hand, each vat enabled eu country also has certain goods and services that are totally exempt from vat.

For example, in the UK there are several vat exemption goods and services specified by hmrc or HM Revenue and Customs department that handles all aspects of customs, excise and vat duties in that country. According to hmrc vat exempt services and goods include charitable activities, betting activities including lotteries and online betting, physical education and sports activities, sale of works or art and antiques, insurance services, loans and credit services, postal services and postage stamps, houseboat moorings and parking services including parking garages, education services, health services, and a few other specific services and goods. However, there are certain exceptions in vat exempt goods and services that vat registered traders and organizations should study since several related activities do fall under zero vat or reduced vat categories.

Each business or organization should certainly employ a capable vat agent to decipher all vat exemptions clearly so as to avoid confusion and ending up on the wrong side of vat laws in that particular country or even in another eu country in case of a vat reclaim on previously paid vat. Most vat exempt goods and services do not allow for any vat reclaim that otherwise is normally possible in reduced vat or standard vat classifications. This is especially important if a trader is trying for a vat refund for vat already paid on import of goods or services from another country. In such cases, an expert vat agent with thorough knowledge of eu vat and even uk vat rules could prove to be very useful if that trader or organization was located in the UK.

Although the European Commission lays down general guidelines to all eu countries that follow vat, each country exempts certain goods and services from the purview of vat based on their own discretions. Thus, traders and organizations that import or export goods or travel to various eu countries should know all about vat exempt rules and classifications since any error could be looked upon with a high level of contempt and suspicion by vat authorities. All eu countries have vat exemption rules for specific goods and services, and traders or organizations can surely reduce their costs or expenses by studying vat rates and exemptions in great detail before taking any action.

Maintaining proper records of vat invoices is mandatory

Opting for vat in any eu country including the UK where VAT has been adopted since many years will require you to issue special invoices and maintaining proper records of these vat invoices is mandatory. You will need to summarize vat amounts in your designated vat returns as well as make these invoices available to any vat officer that conducts a vat audit on your business.

Upon turning into a vat registered trader in the UK you will automatically need to follow all uk vat rules set up by HM Revenue and Customs or hmrc department. These rules are based on eu vat rules issued by the European Commission and are generally followed by other eu countries that have also adopted vat such as Portugal, Italy, Spain, Sweden, Poland, Germany, etc. Most eu countries allow traders to issue vat invoices in specific languages too. Thus, in Poland you will find a faktura invoice being issued during any vat sale, which in turn is the same as a vat invoice issued in the UK.

These invoices need to specifically mention your vat registration number or vat no. along with your business name and address. The serial number of such invoices too should be in sequential order. These invoices also need to mention applicable vat rates against each product or service. For example if your invoice contains 2 products where one product is taxed at the standard vat rate of 17.5% and the other at the reduced vat rate of 5%, then these percentages and rates should be specifically mentioned against each product. Finally, these invoices should also display the vat amounts as well as the gross amount of the complete invoice at the bottom. These invoices will make it easy for you and others to find out the exact vat rates, vat amounts and gross amounts and these figures will also need to be summarized in your vat returns. You can visit the hmrc website to look at samples of such invoices.

If you opt for the standard vat accounting scheme then you will surely need to maintain all records of such vat invoices in detail. If, however, you opt for the flat vat rate accounting scheme then although you will need to mention vat amounts in your invoices, you will be spared the trouble of maintaining detailed records of each invoice. You will also require specific vat amounts when filing for vat refunds if you have already paid vat in a foreign eu country that follows vat. An experienced vat agent would be a welcome addition to your team since maintaining vat records, filing vat returns and following up on vat refunds that could take up to 8 months can be tiring, and your vat agent could take care of all paperwork while leaving you free to focus on increasing your business.

The hmrc vat department has specified on the type of invoices that need to be issued based on the vat accounting scheme that you have chosen after turning into a vat registered trader. These invoices are known as vat invoices and they need to clearly specify your vat number along with vat rates and other details that would be of great help while filing your vat returns and vat refunds too.

All eu countries that follow vat have to follow vat eu directives

Most European Union countries have slowly switched over to VAT or value added tax on goods and services, and in order to comply with a common code all eu countries that follow vat have to follow vat eu directives. These directives are amended regularly in a bid to further fine tune the system so as to avoid tax leaks and ensure better co-operation among member countries in collecting and refunding vat.

The European Union through its website ec.europa.eu tries to educate member countries and vat registered traders in various countries on some of the rules and regulations that apply on current and future vat rates and refunds. Several countries in Europe including the UK, Sweden, Poland, Greece, Germany, Italy, etc have slowly shifted to the system of vat tax in a bid to raise tax revenues and also to plug tax holes that were previously draining precious resources. Each vat enabled country has its own interpretation of european vat or europa vat rules that might vary slightly but are almost similar in principle.

For example, in the UK a trader that has crossed over the vat threshold limit will need to turn into a vat registered trader before issuing any vat invoice. The subsequent vat collected by the trader is then adjusted against any vat paid and the difference is paid to HM Revenue and Customs or hmrc vat department that looks after all issues connected to customs duties, excise and vat in the UK. Similarly, a trader in Poland would need to issue a faktura invoice, which essence is a vat invoice but in Polish language, and pay vat to the relevant vat department in that country.

Since each country has adopted vat in a slightly different manner by applying varying vat rates to similar products, traders all across Europe usually need to hire a vat agent or vat consultant to help file vat returns regularly. These agents need to be experts in interpreting vat eu rules and vat rules applicable in their own country. For example, a UK trader with vat registration needs to appoint a vat agent that is conversant with uk vat rules. If that trader imports goods from other vat european countries that have already charged vat on the same then the vat agent of that trader should be able to file for vat refund so as to reclaim vat back. This process is quite lengthy but can help European traders recover vat amounts previously paid, which in turn can lower their costs and improve their cash flow.

The europa website tries to educate all vat enabled eu countries to follow a common system of vat so as to decrease friction among member countries due to varying vat rates on similar goods or services. Several European countries too have come up with their own amendments as they try to adapt completely to eu vat directives for better vat compliance in their own country and across borders too.

The move of shifting over to vat has benefited various European countries as they have witnessed higher revenue collections over the years. However, in a bid to ensure better co-operation between member countries, vat eu directives and amendments issued by the European Commission have made constant efforts to improve the system of collecting and refunding vat.

Use vat flat rate to reduce your accounting efforts

If you are a vat registered trader in the UK where the system of VAT or value added tax is followed then you can use vat flat rate to reduce your accounting efforts. This vat accounting scheme is offered by HM Revenue and Customs or hmrc for traders that have vat taxable sales of less than £150,000 in a year.

In the UK you will need to go in for vat registration as soon as your taxable sales touch the vat threshold limit of £70,000 in the past 12 months. You can opt for several schemes including the flat rate vat scheme that enables you to pay a fixed percentage of your vat inclusive sales to the hmrc vat department. If you opt for this scheme in the first year itself then you can get an advantage of a 1% discount in your vat rate for the first year. You can remain under this scheme until your total business income touches the upper threshold limit of £225,000.

However, since standard vat rates in the UK are slated to increase to 20% from the current 17.5%, vat threshold limits including vat flat rate threshold limits too are bound to change from January 4, 2011 onwards. You should ask your vat agent or visit the hmrc website to get the exact details for the year 2011. If you are running a business that falls under several vat rates including the standard vat rate, reduced vat rate or the zero vat rate then the flat rate that you will need to apply will be based on the rate that contributes the most to your turnover. This could prove to be a boon or a bane depending on the vat rate that contributes the most to your turnover.

There are several other advantages and disadvantages related to the flat rate scheme. The biggest boon is that you will not be required to maintain detailed accounts of each vat sale that would otherwise be necessary if you opt for the standard vat accounting scheme. You will also be eligible for a 1% discount on vat rates in the first year of the scheme. You will also know as to the exact rate of vat that you need to pay to hmrc at any given time. These features will help you to spend less time in vat accounting and more time on increasing your business.

On the other hand there are a few disadvantages if you opt for this form of vat collection and payment. If most of your purchases are of standard vat rate goods and services then you will not be able to reclaim any vat on those purchases. If you regularly receive vat repayments from hmrc under standard vat accounting then opting for flat rate could end this cash flow. If most of your sales are of zero rate vat goods or services then you might simply end up paying a flat rate on them. You should thus consult your vat agent or vat consultant before opting for the flat rate scheme. Other eu countries might also offer various vat accounting options and if your business is in another eu country that follows vat then you should certainly explore all options before entering a scheme that best suits your business interests.

While turning into a vat registered trader in the UK, you will be allowed to choose from various vat accounting systems based on your taxable turnover, among other criterion. You should certainly opt for the vat flat rate scheme if you want to reduce your accounting efforts without ending up paying additional vat amounts in your vat returns as compared to other vat schemes.