If you are a vat registered trader in Britain you'll be able to steer clear of the problem of double taxation on services utilized from foreign companies when you claim reverse charge vat on services where vat was already paid. This vat procedure will allow you to first pay vat and after that cancel it so your net cost doesn't increase.
If you're a trader that utilizes services of foreign companies, especially those located in vat-friendly eu countries then you may have already paid vat in those countries. Alternatively, you may also have obtained such services in the UK itself from a supplier situated in a eu country. All these factors would http://vatvalidation.com end up boosting your expenses as you could end up paying vat on certain services including those related to land, property, intra EC-freight services, and other such services as defined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification regulations.
In case you have a bit difficulty in interpreting these vat rules you then should enrol the services of a good customs and excise customs vat agent having a wide reach practically in most eu countries that practise vat. Such an agent would surely understand all uk vat and eu vat regulations and may enable you to claim reverse charge vat that might have already been paid to a foreign company situated in another country together with a vat-friendly eu country.
You are able to reclaim vat already paid for specified services while filing your vat returns itself. If you're in the UK then you'll have to calculate and indicate how much paid in Box 1 of the vat return form. You will then need to specify exactly the same amount in Box 4 of that return to ensure the amount stands cancelled. You'll have to specify the full quantity of the provision in Box 6 and 7 in the vat return form in order to complete your reverse charge vat claim. However, you will need to convert the currency of the vat paid in the foreign country to sterling before you fill in the amounts in those boxes.
This reverse charge process is also known as tax shift and you may go in for such a vat reclaim only if you are a vat registered trader in the UK. In order to become a vat registered trader, your taxable sales need to go over ?70,000 in the previous 12 months while you may even apply before this vat threshold amount has been achieved. As soon as you start charging vat to your customers and file regular vat returns then any services rendered by you an overseas company can be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department.
Although following vat rules usually are not very difficult, it is always better to choose services of an proficient vat agent that may handle all your vat requirements seamlessly. This will likely enable you to focus on boosting your business while your vat agent files for reverse charge vat and recovers your taxes that have previously been paid for services rendered by a foreign company within and out the UK.