VAT in UK – What You Need to Know About VAT!
VAT in UK
VAT in UK, also known as British VAT, is the fee that retailers pay to the VAT authority for selling consumer goods and other items to customers in the UK. The fee is usually added to the price of the item. As a consequence of the introduction of VAT, the price of goods has increased substantially and there are many changes that take place throughout the supply chain to ensure that this trend continues. A business that is VAT compliant can benefit from a number of benefits, including reduced costs as well as improved profitability.
Goods And Services
VAT in UK is charged on many types of goods and services, including some that are produced in another member state. Therefore, many businesses, whether they are situated in the UK or another member state, must be VAT-registered. In the United Kingdom itself, the VAT is based on the location where the buyer and seller first enter into a transaction. If the goods sold to the customer within the United Kingdom were purchased outside the UK, then the trader would not be obliged to charge tax. However, if the supplies sold to customers within the UK were brought into the country, the trader would need to register the goods sold, so as to become VAT-registered.
VAT Registration
Businesses can obtain their VAT Registration either online or through their local branch. In order to find out if a business is VAT-registered, it must submit an application form. This application can be obtained from the VAT Service office, or by phoning the same. Online services are available, but there is a minimal service charge. Businesses should request an online VAT return, which contains details about the business’s vat taxable turnover, including its VAT Registration. Businesses can also view their previous years’ return, in order to check on how much they have been charged in terms of tax.
Register With The HMRC
In order to receive a VAT credit, companies must register with the HMRC (HM Revenue and Customs). Companies may be VAT-registered if they meet certain criteria. Companies that have been registered for less than three years must, after three years, register for a new certificate with the HM Revenue and Customs. Furthermore, companies must, after three years, submit an application for a new vat number with the HM Revenue and Customs. An original copy of the VAT return must also be retained. After three years, if a company has not submitted a new certificate, it must apply for an amendment to its original VAT registration.
Rate Of Duty
The rate of duty applicable to a specific item will usually be determined by a European Commission regulation. The rates for many specific items, such as food, fuel and certain garden equipment, are subject to tariffs under EU regulations. While most goods are liable for excise duties, others are not. These include some children’s toys, nursery goods and clothing that are imported into the UK. On the other hand, all goods that are imported are required to register with the HM Revenue and Customs.
Pay On Your Goods
In addition to the rates and custom duties, there are many other factors that can determine the amount of tax that you pay on your goods and services when in the UK. These include the size, weight, volume, manufacturing process, business location, trade name and date of birth of your company. As these factors are constantly monitored by the HMRC and Customs, distance selling companies are generally required to pay the same rates of tax, irrespective of where they operate within the United Kingdom.
Distance Selling Company
If a distance selling company is to benefit from any special rate of tax credit, they must register with the HMRC and register all goods sold, whether the buyer is a resident of the UK or not. The company must also keep complete records pertaining to every sale. These records will enable the authorities to trace the source from where the VAT was charged and then calculate the VAT at the source. The tax amount must be paid before the delivery of the goods. If it is not paid, then the VAT will be charged again.
Non-Existent Businesses
Non-existent businesses and new businesses in the United Kingdom are also required to register with the HMRC for the purpose of VAT in UK. However, it differs from one country to another, as each and every country has its own VAT rates. So if you are planning to sell in UK and want to buy goods or services, you must make sure that you pay the right amount of tax to the government. However, if you are planning to work online and if you have no contact with the consumer directly, then it is advisable to engage a company that provides VAT in UK services.
