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.