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.