Claim reverse charge vat on services where vat has already been paid

If you're a vat registered trader in Britain then you can avoid the problem of double taxation on services utilized from foreign companies whenever you claim reverse charge vat on services where vat has already been paid. This vat procedure allows you to first pay vat and after that cancel it so your net cost does not increase.

If you're a trader which uses services of foreign companies, particularly those situated in vat-friendly eu countries then you certainly may have already paid vat in those countries. On the other hand, you may also vat number search have obtained such services in Britain itself from the supplier situated in a eu country. Every one of these factors would end up boosting your expenses as 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.

If you have a lttle bit difficulty in interpreting these vat rules then you should enrol the services of a competent 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 could enable you to claim reverse charge vat that might have been paid to a foreign company situated in another country including 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 will need to calculate and indicate how much paid in Box 1 of your vat return form. You'll then have to specify exactly the same amount in Box 4 of the return to ensure the amount stands cancelled. You will also need to specify the total amount of the provision in Box 6 and 7 of the vat return form so as to complete your reverse charge vat claim. However, you will have 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 can also be known as tax shift and you may go for such a vat reclaim only if you're a vat registered trader in Britain. In order to become a vat registered trader, your taxable sales have to go over ?70,000 in the previous 12 months while you can even apply before this vat threshold amount may be achieved. Once you start charging vat to the customers and file regular vat returns then any services rendered by you an overseas company could be reclaimed back in future vat returns, provided you follow all necessary guidelines issued by hmrc vat department.

Although following vat rules usually are not very difficult, it is usually preferable to choose services of proficient vat agent that can handle all 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 which may have already been paid for services rendered by a foreign company within or outside the UK.