Claim reverse charge vat on services where vat was already paid

Claim reverse charge vat on services where vat was already paid

If you're a vat registered trader in Britain then you can steer clear of 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 then cancel it so your net cost doesn't increase vat number.

If you are a trader which uses services of foreign companies, especially those situated in vat-friendly eu countries then you may have already paid vat in those countries. On the other hand, you may also have obtained such services in the UK itself from a supplier situated in a eu country. All these factors would 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 def ined by the HM Revenue and Customs or hmrc department in conjunction with the European Community simplification regulations.

If you have a lttle bit difficulty in interpreting these vat rules you then should enrol the expertise of a good customs and excise customs vat agent with a wide reach practically in most eu countries that practise vat. This kind of agent would surely understand all uk vat and eu vat regulations and could enable you to claim reverse charge vat that might have already been paid to a foreign company situated 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 have to calculate and indicate how much VAT paid in Box 1 of your vat return form. You'll then have to specify the same amount in Box 4 of that return so that the amount stands cancelled. You'll need to specify the total amount of the provision in Box 6 and 7 of 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 can also be called tax shift and you may go in for this type of vat reclaim only if you're a vat registered trader in Britain. In order to be a vat registered trader, your taxable sales need to cross over ?70,000 in the previous 1 year while you may even apply before this vat threshold amount may be achieved. As soon as you start charging vat to your customers and file regular vat returns then any services rendered by you a foreign company can be reclaimed back in future vat returns, provided you follow all necessary guidelines from hmrc vat department continued.

Although following vat rules usually are not very difficult, it is always better to choose services of proficient vat agent that can 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 which may have already been taken care of services rendered by way of a foreign company within or outside the UK.