Claim reverse charge vat on services where vat was already paid

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 has already been 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 are a trader that utilizes services of foreign companies, particularly those situated in vat-friendly eu countries then you may have already paid vat in those countries. On the other hand, you might also have received such services in the UK itself from the supplier located in a eu country. All these factors would turn out increasing your expenses since you might 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 along with the European Community simplification regulations.

In case you have a bit difficulty in interpreting these vat rules you then should enrol the expertise of a competent customs and excise customs vat agent with a wide reach in most eu countries that practise vat. Such an agent http://vatvalidation.com would surely understand all uk vat and eu vat regulations and could enable you to claim reverse charge vat that may have already been paid to a foreign company located in another country including a vat-friendly eu country.

You can reclaim vat already paid for specified services while filing your vat returns itself. If you are in the UK then you will need to calculate and indicate the amount of paid in Box 1 of your vat return form. You will then need to specify the same amount in Box 4 of the return to ensure the amount stands cancelled. You'll have to specify the full quantity of the supply in Box 6 and 7 in the vat return form so as to complete your reverse charge vat claim. However, you will need to convert the currency of any vat paid in the foreign country to sterling before you decide to fill in the amounts in those boxes.

This reverse charge process can also be known as tax shift and you can go in for this type of vat reclaim only if you are a vat registered trader in the UK. In order to be a vat registered trader, your taxable sales need to cross over ?70,000 in the previous 12 months although you can even apply before this vat threshold amount may be achieved. Once you start charging vat to your customers and file regular vat returns then any services rendered by you a foreign company could 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 preferable to opt for the services of proficient vat agent that may handle all of your vat requirements seamlessly. This will likely enable you to concentrate on increasing your business while your vat agent files for reverse charge vat and recovers your taxes that have previously been taken care of services rendered by a foreign company within and out the UK.