Know all about the vat deregistration process to cancel your vat number

If you are a vat registered trader in the UK that wants to surrender your vat certificate for a number of reasons then you need to know all about the vat deregistration process to cancel your vat number. Although the process of canceling vat registration is quite simple, you will still need to account for vat and file a final vat return.

There are several reasons that could compel you to come out of the vat system. You can apply for deregistration of vat if your business has collapsed and you have filed for insolvency, your taxable sales have dropped dramatically and you expect them to drop below the vat threshold limit of £70,000 in the next 12 months, you sell your business, there is a change in the legal status of your business, you either join another vat group or disband your present vat group, or you intend to join the agricultural flat rate vat scheme. There are several other reasons that are specified by HM Revenue and Customs or hmrc vat department that can make you a valid candidate for vat deregistration.

You can also voluntarily step out of the vat tax system if your taxable supplies are mainly or even wholly zero rated. You can even do so if your input tax usually exceeds your output tax. However, in all the above circumstances you will need to provide required proof as well as convince hmrc vat as to the genuineness of the reason as to why you want to cancel your vat registration. Once you are deregistered from vat then you will no longer be allowed to issue vat invoices or file vat returns.

In order for you to deregister yourself from VAT you will need to contact your vat agent that will guide you on the exact process to be followed so that you do not end up making errors. You will need to fill up the VAT 7 vat form after you have read and understood vat notice 700/11 on “Canceling your registration” along with notice 700/1 among other notices in this range. This form will require your vat registration number, business name and address, and will require you to tick the appropriate reason as to why you have applied for deregistration along with providing the required anticipated sales figures. You will also have to mention the gross value including vat of stocks and assets that you currently hold. You will also need to specify if you follow the vat cash accounting system.

Once you have filled up the vat deregistration form then hmrc will usually reply within a period of 3 weeks. In case you do not receive a reply then you should remind them. If hmrc is satisfied with your application then you will receive a formal notice of vat cancellation on VAT35 form and also receive a formal notice of exemption from registration on VAT8 form. Your vat agent will now be able to guide you on matters regarding reclaiming vat after deregistration and claiming relief on bad debts after deregistration.

If certain circumstances compel you to apply for cancellation of your vat certificate then you will need to follow proper procedure as laid down by hmrc vat department. If all your papers are in order and if there are no mistakes in your deregistration form then you should be out of the vat system within a month of filing for vat deregistration.

Accurate vat calculation will help you calculate exact vat rates

Once you start issuing vat invoices to your clients then accurate vat calculation will help you calculate exact vat rates. Calculating vat rates is quite simple and you will need to display all your calculations in your vat invoices and your vat returns too.

If you are located in the UK then you would have turned into a VAT registered trader once your taxable sales would have reached the vat threshold figure of 70,000 pounds within the past 12 months. This would result in issuance of vat invoices by you to all your future clients. Your vat invoice would need to mention your vat number along with vat rates next to your goods or services that you have sold to your clients. In order to calculate vat you need to know the classification of your goods and services as decided by HM Revenue and Customs or hmrc vat department that manages all aspects of vat in the UK.

There are 14,000 vat classifications provided by hmrc and if you have trouble in slotting your goods and services in the right classification then you should appoint an expert vat agent with complete knowledge on uk vat rules and even eu vat rules if you import goods from any eu country. In the UK vat is spread into three slabs, namely the standard rate of 17.5% that will soon increase to 20% from January 4, 2011. There is another reduced rate of 5% that is also applicable on certain children’s goods and other services along with a zero vat rate on specific goods and services. Thus, if a certain product is taxed at 17.5% then your calculations will need to be based on that vat rate only.

For example, if you sell a product at £100 to a client that attracts vat at 17.5% then your vat calculations will need to display the vat rate, i.e. £17.50 after the product rate as well as the total amount of the sale including vat, i.e. £117.50, which is the final value of your vat invoice. These amounts will also need to be calculated and summed up in your vat returns. Similarly any vat already paid on goods or services imported by you into the UK can be claimed back through a vat reclaim form that also has to calculate the vat amount paid. You can easily install a vat accounting software program on your computer so as to accurately calculate vat on each vat invoice since mistakes will not be looked at kindly by the hmrc vat department.

Your vat returns will also need calculations of various vat amounts paid and calculated. These calculations will also differ on the vat scheme that you opt for since the flat rate scheme will call for different calculations as compared to the other schemes. You will also need to learn on how to calculate vat amounts from vat exclusive and vat inclusive prices so as to get the exact amount of vat.

Accurate calculation of vat is very important while buying or selling goods that are subject to vat tax. These amounts will need to be reflected in your purchases, sales, vat returns, and vat refunds too. Your business will run smoothly while hmrc will also remain pleased with you only when your vat calculation is accurate and clear in all your vat documents and books.

You need uk vat registration if you want to charge or reclaim vat

If you are a trader in the UK with rising sales or wish to voluntarily enter into the VAT tax system then you need uk vat registration if you want to charge or reclaim vat. Once you turn into a uk vat registered trader then you can start charging vat or value added tax to your clients and even reclaim previously paid vat on goods and services, even when paid in another eu country.

Just like most other countries in the European Union such as Greece, Spain, Poland, Sweden, Germany, Italy, etc, the UK too embraced the system of vat as a means of taxing goods and services. If your business is quite small and your end-clients are individuals that do not need vat invoices then you would be better off by remaining outside the scope of vat as this will lower your costs. However, once your taxable sales cross £70,000 in the previous 12 months then you will have to register for vat unless you deal only in vat exempt goods or services.

On the other hand, if your clients want you to charge vat to them so that they can offset it against their sales then you can apply for vat registration even before the vat threshold limit has been achieved. You can apply for uk vat registration as an individual, partnership, company, club, association, charity, etc depending on the nature of your business. You will need to apply online for registration to the HM Revenue and Customs department or hmrc department provided you meet all criteria posed by them.

If you import taxable goods from other eu and non-eu countries to sell them locally, re-export goods or services outside of the UK, or even buy goods locally to resell them, then you will have to get vat registered in the UK, especially if you have crossed over the vat threshold limit. You can apply for online vat application only when you use VAT 1 form, which is for small businesses run by individuals. All other registration forms can be downloaded but will need to be filled manually before being dispatched to the hmrc vat department for processing. You should get your vat number within 30 days of applying, provided all your documents are in order.

You will now be able to issue a vat invoice against each sale and will also need to specify vat rates against each product or service. You will also need to file vat returns as decided by the hmrc department. However, if you have already paid vat on goods and services, even if they were paid in another eu country then you will now be able to file for vat refund and receive that amount back into your bank account. This feature will help improve your business cash-flow while also lowering your product or services costs. In case you have difficulty in understanding uk vat and eu vat rules then an expert vat agent could help solve all your problems related to vat returns and vat refunds so that your business keeps on growing without any taxation hiccups.

If your business is poised to break over the vat threshold limit of £70,000 in taxable sales then you will need to turn over a vat registered trader. However, this is a move in the right direction since once you complete your uk vat registration process and turn into a vat registered trader then you will be able to claim for vat refunds and infuse that money into your business.

Maintain vat accounting standards for easy access to vat records

If you have shifted over to vat or value added tax system then you need to maintain vat accounting standards for easy access to VAT records. Although most eu countries including the UK do not have rigid or set standards to maintain vat records, you will still need to ensure that all relevant vat figures are easily accessible in case the hmrc vat department asks for them or pays you a visit.

Over the past decade, an increasing number of countries including those within the European Union have shifted their tax system on goods and services to vat. This system taxes goods and services each time there is a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the UK then you might have turned into a vat registered trader once your taxable sales would have hit the vat threshold limit of £70,000 in the previous 12 months.

Once you become an integral part in the cycle of vat tax chain then you will need to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You will be issued a unique vat number that will need to be mentioned in each vat invoice that you will now be required to generate with each sale. You will also have to display vat rates of each product or service sold to your clients. When you purchase goods or services from vat registered traders then you will also need to check if their invoices too follow the same format as specified by hmrc vat.

In addition, the hmrc will also specify the frequency of filing vat returns so that all vat that has been collected by you on your sales can be paid to the government. Your vat returns will need to provide a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go in for a vat reclaim or vat refund then there are separate vat forms that need to be filled up and delivered with documentary proof. The hmrc offers several vat online services including online filing of vat returns and this should help you to speedily complete all vat formalities on a regular basis.

In the UK, you will also need to maintain up-to-date vat accounting records such as bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, and other books of accounts relevant to your business. If you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you will also need to clearly specify the classification of those goods or services in your records. There are various accounting schemes in vat such as annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will require specific methods to maintain the required records.

Once you turn into a vat registered trader in the UK then you will need to follow vat rules and regulations that have been specified by the hmrc vat department. These methods are not very difficult and by maintaining proper vat accounting standards, it will become very easy for you and the hmrc to get access to your vat records.

Apply for registration for vat to turn into a vat registered trader

If you have crossed the VAT threshold limit or want to become a part of the vat or value added tax system then you will need to apply for registration for vat to turn into a vat registered trader. Once you turn into a vat registered trader then you will be empowered to reclaim vat paid in another eu country and thereby lower your costs as well as improve your business cash flow.

Several eu countries including the UK, Spain, Poland, Sweden, Italy, Germany, etc have moved over to vat for taxing goods and services. Vat is thus followed even while trading between member eu countries. If you have started a new business in the UK and have touched £70,000 pounds in taxable sales in the past 12 months then you can apply for vat registration with the HM Revenue and Customs or hmrc department. You can even apply before this threshold limit is achieved if you sell your goods or services to mostly vat registered traders. Vat registration can be done as an individual, partnership, company, trust, etc as deemed fit by the hmrc department.

However, once you apply for vat registration then your costs could increase slightly, and if you sell your goods and services locally in the UK at a retail level then you could opt to remain outside of vat if you only sell vat exempt goods. However, if you try to artificially try to separate your business activities simply to remain outside the system of vat then the hmrc vat department might not take your actions lightly in case you are discovered doing the same. There are several advantages of entering the vat system since it will avoid the problem of double taxation by allowing you to reclaim vat already paid on goods or services in another country too.

The entire process for registration for vat is quite simple but if you are not sure about yourself then you should simply appoint an expert vat agent to handle all vat matters. The hmrc vat department offers several vat online services including applications for registration for vat. You can apply for vat through your vat agent too provided you inform the department of your choice. Once you apply for vat registration then the process of approving your application usually takes between 10 to 30 days. Until then you can continue issuing regular invoices to your clients. However, during that period you will need to factor in applicable vat rates and re-issue those invoices issued after your application so that your clients can reclaim vat from their end.

Once your application is approved then you will receive your unique vat registration number and will need to display it on all vat documents including your vat invoices, vat returns, and vat refunds. You will also need to issue a vat invoice that separately shows all vat rates applied in that invoice along with your vat no at the top. You will need to provide a summary of all vat paid and collected in your vat returns that will need to be filed periodically as required by the hmrc vat department. If you have already paid vat on goods and services in another eu country then you can try for vat reclaim once you are an official vat registered trader.

Vat registration is a simple online process that needs to be done first if you want to turn into a vat registered trader in the UK. You can simply fill up the online vat registration form and submit it to the hmrc vat department when you apply for registration for vat.

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

If you are a trader in the UK with rising taxable sales then you need to pay uk vat to enjoy all benefits offered by this taxation system. Once your taxable sales touch the vat threshold limit of £70,000 in the past 12 months then you need to apply for vat registration so that you too can become part of this tax system that is in force in most European countries too.

If you are a very small trader that mostly sells retail goods then you can remain out of the purview of vat or value added tax as long as your taxable sales do not touch £70,000 in 12 months. However, if your sales touch that figure or if you sell goods to vat registered traders then you would be better off as a vat registered trader in the UK. Vat has been employed as a means of collecting taxes on goods and services in most of Europe and the UK too follows this system. The vat department in the UK is headed by HM Revenue and Customs or hmrc department.

Once you have crossed over the vat threshold limit for uk VAT then you will need to apply for vat registration. You can do so even before you reach this limit if you feel that you need to reclaim vat that has already been paid on goods and services, especially in a foreign eu country where this system is followed. You should hire the services 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 so that there are no problems in claiming back vat.

Once you do turn into a vat registered trader in the UK, which could take up to a month after you file an online vat application then you will need to charge vat as per the 14,000 goods and services classifications provided by the hmrc vat department. This will have to be done through each vat invoice that you will be required to issue during each taxable sale. UK has 3 vat rates starting with the standard rate of 17.5%, reduced vat rate of 5%, and the zero vat rate. Certain goods and services are totally vat exempt too.

Once you turn into a vat registered trader so as to pay and collect uk vat based on vat invoices then you will also need to file your vat returns on a regular basis. Again, your vat agent will be required to calculate vat to be paid or refunded based on your vat purchases and sales. If you have imported goods or services in the UK after paying vat in a eu country then you can avoid double taxation by filing a vat reclaim form. You will be awarded vat refund between 4 to 8 months after your claim is successfully processed by hmrc and the member country. Overall, vat is a good tax system to avoid double taxation as well as plug many loopholes that were present in the traditional sales tax system.

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

For selling to vat registered traders it makes sense to register for vat

If you are a trader in the UK or any other EU country that has adopted VAT or value added tax as a method of collecting taxes then for selling to vat registered traders it makes sense to register for vat. You will be able to pass on vat benefits to your customers while also being able to reclaim vat that might have previously been paid in another country.

In the UK you can register as a vat registered trader irrespective of whether you are an individual running a business, a partnership, a club, a company, an association, or any other type of organisation. Basically, if you are dealing in goods or services that attract vat then you can get registered for vat. In addition, if most of your customers are vat registered dealers then it definitely makes sense for you to continue the vat tax chain and turn into a vat registered dealer.

If your taxable sales cross over the vat threshold limit of £70,000 in the previous 12 months then you are eligible for vat registration. However, you can also volunteer to get registered for vat before crossing the threshold limit too. Vat is an efficient method of taxing goods and services so as to avoid the problem of double taxation as well as bring about transparency in the tax system. If you are planning to import goods or services into the UK and then sell them locally then you can also apply for vat refunds once you turn into an official vat registered trader. You will need to apply to the HM revenue and customs department or the hmrc department, which in turn will forward your refund application to the concerned eu country.

Once you register for vat with the hmrc department and turn into an official vat registered dealer then you will need to issue a vat invoice that has been specified by hmrc. You will need to mention your vat number, vat rate and vat amount on the invoice. UK has 3 types of vat rates with the standard rates at 17.5%, reduced vat rates at 5% and zero vat rates. Some goods and services with a social impact are also vat exempt. You will first need to check as to which vat rate applies to each product or service before you start issuing vat invoices and start charging the applicable rates.

The vat rules in different eu countries that have adopted vat are slightly different and if you plan to import goods from such countries then you need to know much more than simply what is vat. An expert vat agent with sufficient knowledge of customs and excise duties that also knows all about uk vat and eu vat rules should be hired for smooth import of goods and services into the UK. Once you turn into a vat registered dealer then you will also have to file vat returns at the hmrc specified periods. If you deal in vat exempted goods then you will not be able to claim any vat refunds.

The hmrc offers vat registered dealers a chance to file their vat returns online itself. Your agent can also file the return on your behalf. However, before you become a part of the vat cycle you need to first register for vat so that you too can enjoy all tax benefits offered by this tax system.

You can reclaim vat to reduce the burden of double taxation

If you have already paid VAT in a foreign eu country and have to pay for the same again in your own country then you can reclaim vat to reduce the burden of double taxation. The entire procedure can be completed online, especially if your vat registered business is situated in the UK where the HM revenue and customs or hmrc department offers several vat online services including the vat refund scheme that makes reclaiming vat an easy process.

If you have purchased goods from another vat enabled country in the European Union such as Spain, Sweden, Hungary, Poland, Italy, Germany, etc where you do not have a vat registered business and have already paid vat in the country of origin then you can and should claim that vat back. This will not only reduce your product cost but also allow for vital funds to flow back into your business. Even though the vat reclaiming process usually takes between 4 to 8 months to complete, you can simply appoint a vat agent that is an expert in eu vat and uk vat refund rules. This will help you to concentrate on your business while your agent tries to reclaim vat on your behalf by using the online vat refund scheme.

Before you can post your first claim for vat, you will need to be a vat registered trader in the UK and will also need to register for vat refund with the hmrc. You will have a maximum of 9 months after the end of a calendar year to make your vat refund application. Since you can simply fill out the online vat form to reclaim any previously paid vat, you will not have to fill out and dispatch any paperwork but might need to attach scanned copies of vat paid invoices for claims over a stipulated amount. Some countries might also insist on looking at original invoices that you might need to dispatch in order to get a successful refund. Again, your vat agent can help you to complete all necessary formalities.

Many eu countries have their own version of a vat invoice and have different vat rates for various goods and services. For example, Poland requires its vat registered traders to issue a faktura invoice or vat invoice. However, most eu countries do offer some form of vat refunds to avoid the problem of double taxation on goods and services. You cannot deduct the vat refund amount in your routine vat returns but will instead have to use the vat refund scheme for the same. If you have made a vat reclaim in a eu country then you will usually receive the refund amount in their currency. You can either transfer the refund amount to an account in that country or directly arrange for the money to be received in your UK bank account by providing them the necessary details including your bank account number.

If you constantly need to import goods or services into the UK where vat has already been paid then you should register for the vat refund scheme offered by the hmrc vat department. Once you successfully reclaim vat then you can accurately price your products and services while receiving a much needed financial injection in your business.

Use online vat registration for faster and secure vat registering

If you are a trader based in the UK or any other EU country that has adopted vat as a medium of taxation then you should use online VAT registration for faster and secure vat registering. Most countries have computerised their vat operations and you too should save on time and effort by using all online vat services provided by your own vat department.

In the UK vat rules specify that you can apply for vat registration if your taxable sales rise over the vat threshold limit of £70,000 in the past 12 months or if you feel that they will do so within the next 30 days, although you can still register even before your sales touch this figure. However, you can at present only complete basic vat online registration by filling up and submitting vat form 1 online. This form is normally used by small businesses. If your business is a partnership firm, a group of companies, or plans to do business internationally then you can download and print all vat registration forms but will be required to fill up the form manually before sending it back to the HM Revenue and Customs or hmrc vat department.

If you plan to go in for online vat registration in another eu country that has adopted vat then you will need to first study all applicable vat rules before you register your business online. In case you have trouble in deciphering uk vat or eu vat rules then it is better if you appoint a vat agent or even a customs and excise customs vat agent in case you plan to conduct your business on an international level. This will allow you to remain safe while following all vat rules in different countries with falling foul of any department.

Once you send your vat online registration form to the hmrc department then you will receive a vat questionnaire within 15 days that will require additional details to be submitted such as your business address, telephone and fax numbers, bank account numbers, and several other details connected to your business including a few purchase and sales invoices.

Once your application is approved then you will receive your vat number and you will now need to change your invoicing method to issue vat invoices for all your sales. This vat invoice will have to display your vat no, vat rate, vat amount and the same will also need to be displayed on your vat returns that will need to be submitted to the hmrc vat department at regular intervals.

Currently, in the UK there are 3 types of vat rates applicable to all goods and services. The standard vat rate is 17.5% that is set to increase to 20% from January 4, 2011 onwards. There is a reduced vat rate of 5% and a zero vat rate on specific goods and services that will remain the same. There are also certain goods and services that are vat exempt. However, the vat rates are different in each eu country although the basic concept of charging vat tax remains the same in all vat enabled countries.

If you want to register your business for vat then going online will help save time and also allow you to securely complete the required process required for vat registration. You should simply log on to the hmrc vat department if your business is located in the UK or ask your vat agent to do so on your behalf before using online vat registration to get registered as a vat dealer without any problem.

Pay import vat when you import goods from eu special territories

If you are importing goods into the UK from specific regions of the world then you will need to pay import VAT when you import goods from eu special territories or even from non eu countries. This tax is collected by the hmrc vat department or the hm revenue and customs department at the port or airport itself and the goods are then subject to local sales vat rules.

The hmrc has provided for 14,000 classifications of goods and services that are subject to customs duties, excise duties and import vat. Most alcohol and tobacco products along with certain activities such as gambling are subject to excise duties while almost all other imports fall under customs duties and import vat depending on the goods and the country from where they arrive.

The hmrc has specified eu special territories where import vat will be levied if goods or services are brought in or sent to such territories. They are The French Overseas Departments of Guadeloupe, The Canary Islands in Spain, The Aland Islands in Finland, French Guiana, Mount Athos and Reunion and Martinique in Greece, and The Channel Islands in the UK. This vat will also be levied when you import goods from non eu countries.

However, if you are a vat registered trader in the UK then you can apply for a vat refund in case you have already paid vat on any goods in the country of origin itself before being imported into the UK. You can also offset this vat against sales vat if the goods that you have imported are sold in the local UK market. Countries such as the UK and Italy also offer special vat deferment schemes where you can get relief from import vat for up to one month by filing out a special vat form with the hmrc and opening of a special vat deferment account with them. This move would help protect your cash flow.

Once you start selling your goods or services in the local market then you will also need to charge the local sales vat rate to your clients. You will need to make vat invoices that specifically mention vat rates and also file regular vat returns. If you have problem in understanding various duties and taxes imposed by the hmrc then you should engage the services of a proficient vat and customs agent. This will allow you to concentrate on expanding your business while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.

The import vat rate is the same as sales vat rates of similar products sold in the UK. The UK has 3 vat rate slabs. The first is the standard vat rate of 17.5% that is slated to rise to 20% from January 4, 2011. The second is the reduced vat rate of 5% while the third is zero vat rate. There are also certain goods and services that are totally exempt from any vat.

You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the costs on an accurate basis. You should use all legal avenues to reduce your costs such as vat refunds, vat deferments, etc so that you can lower your costs further and improve the cash flow of your business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and use the services of an efficient vat agent to claim additional vat back.