Use vat software to easily calculate vat and file correct vat returns

If you are a vat registered trader in the UK or any other eu country that follows vat then you should definitely use vat software to easily calculate vat and file correct vat returns. Technology has made it easy to implement and track vat calculations, and you too can use your computer and the internet to successfully implement vat in your business.

All aspects of VAT in the UK are implemented by Her Majesty’s Revenue and Customs or hmrc. The hmrc vat department offers a vast range of vat online services that can be easily utilized for your business once you get registered at their website. Your vat agent can also get registered to represent you while filing your vat returns, vat refunds, etc so that all your vat issues are handled in a professional manner. In addition, hmrc also offers you a chance to choose your own vat software from a list of various software companies that have been successfully tested by hmrc.

Choosing a software package to calculate vat amounts and vat returns, and present them online to hmrc vat is sure to save you a lot of effort and minimize chances of errors. You will also save a lot of time by avoiding double paperwork while directly presenting your vat returns online to hmrc. Many software products also allow you to manage all aspects of your business including creating and printing each vat invoice with your vat number, vat rates and vat amounts on it, presenting date-wise sales and purchase figures along with matching vat collected and paid figures, etc. Such software can make your business life a lot easier since you can now focus on running your business instead of getting swamped in paperwork.

You should seek out hmrc recognised software if you want total peace of mind while filing your vat returns. You should however, insist on a complete demonstration of any software product before you purchase it or try out a trial version before you make up your mind. The software that you finally choose should be priced reasonably, should be easy to use, should be reliable and sturdy, and should be flexible enough to accommodate your specific accounting needs. Hmrc also offers a free online vat return product that can be utilized to file online vat returns. You can make your pick after careful consideration.

In addition, hmrc also provides several other online services such as vat registration forms, online vat refund facility, and many more that can be utilized securely by either yourself or your vat agent on your behalf. These features will help you to save time, money, and effort while also allowing you to track the status of your accounts. You can now manage your accounts with hmrc on a 24/7/365 basis with fewer chances of committing any errors. Trying to maintain vat accounts manually will not only take up a lot of your precious time but could also result in costly errors in the form of penalties in case you make a mistake.

Managing vat can become extremely easy if you have the right software on your computer that can also calculate and dispatch online vat returns without any problems. You should choose vat software that is compatible with and approved by hmrc vat for seamless integration so that you can make accurate vat calculations and quickly file your vat returns online.

Using all vat services offered online by hmrc can save time and effort

Once you have entered the system of VAT or value added tax in the UK then using all vat services offered online by hmrc can save time and effort. Most eu countries that have also adopted vat offer similar services that help businesses file vat returns, vat refunds, and also offer them to study vat rules so as to stay safe within the boundaries of vat.

If you are a trader in the UK that has adopted vat along with other eu countries such as Greece, Poland, Sweden, Germany, etc then there are several services offered online by hmrc or Her Majesty’s Revenue and Customs that can help you even before you turn into a vat registered trader in the UK. You can view all vat rules pertaining to uk vat while also studying eu vat rules and directives issued by the European Commission that guides all eu countries towards a single market. Learning about these rules will help you to quickly get comfortable with the system of vat while also ensuring that you remain on the right side of vat tax laws.

You will only need a computer and an internet connection to get access to various vat services offered online by hmrc vat. In fact, if you are the sole owner of your business then you can directly fill up your vat registration form online and submit it to hmrc so as to get the process rolling without any delay. You can download the applicable vat form for vat registration in case your business is a partnership, trust, corporation, institution, charity, etc but you will need to send filled-up forms by post back to hmrc.

In addition, hmrc also offers several other online services that can be utilized once you get registered at their website. You should appoint a vat agent to represent you in case you do not have the required skills to file vat returns or vat refunds. Your vat agent can also officially register online at hmrc vat to represent you once you provide the required permission. Your agent can now file vat returns and refunds securely on your behalf online so as to save a lot of time and effort that would be otherwise required to send it through post. You will also get some additional time to file your returns since you will now have access to such services on a 24/7 basis. You can also view past returns filed after November, 2009.

Various other eu countries that have also adopted vat offer vat services online to their traders. Just as you would get a chance to study all uk vat rules, other traders in various eu countries too would get a chance to study vat rules in their own country while also getting a chance to observe eu vat rules and directives. These facilities offered by hmrc will help you to stay abreast of the latest notifications on vat and help you to comply with them well in time to avoid any tax complications.

The system of vat can seem a little intimidating if you are on the verge of entering this system of taxation on goods and services. However, if you are a trader in the UK then hmrc offers a host of vat services online including vat registration, vat return and vat refund facilities that can make handling your vat tax issues a lot easier while enabling you to stay focussed on all aspects of your business at the same time.

Go in for vat recovery for vat already paid on goods or services

There are certain conditions that might have compelled you to again pay VAT on goods or services that have already been paid by you and in such cases you should go in for vat recovery for vat already paid on such goods or services. Your vat agent could guide you during this complex process that needs to be followed through if you want vital funds to flow back into your business.

Often, while importing goods into the UK where vat is applicable, from another eu country that also follows the vat tax system, you might end up paying vat in the country of origin. You might also end up paying vat again in the UK on those same goods. Similarly, you or your employees might have to pay vat on services used in another eu country that has adopted vat. However, all is not lost since hmrc or HM Revenue and Customs department in the UK allows you to reclaim that vat amount back, albeit within 4 to 8 months.

If you have utilized capital goods for your business or regularly import goods from eu countries that follow vat such as Sweden, Germany, Poland, Portugal, Spain, etc then paying vat twice can increase your product costs in an adverse manner. Similarly, taking part in trade shows or arranging for food and accommodation for your staff in a foreign eu country can attract local vat of that country and you need to reclaim that vat once your employees return back to the UK. You essentially have 9 months to claim for vat recovery for such vat paid on goods and services in the preceding year.

You will certainly need to carefully preserve each vat invoice or receipt to prove the vat amounts that have already been paid against those goods or services. You will also need to be a vat registered trader in the UK before you can make any vat refund claims. You will first need to register at the hmrc vat website before you can apply for vat recovery or use any of their other vat online services offered by them. You can then file an electronic application for recovery of vat and you might also have to attach all required documents electronically before emailing the same to hmrc. Hmrc will send your application for processing to the country of origin where vat was originally paid so that the eu country can process and refund that vat amount.

If your vat agent has adhered to all requirements for successful vat refund then you can expect the vat amount to be deposited in your bank account within 4 months or might have to wait for as long as 8 months to receive the amount. However, once your vat agent files vat refunds on a regular basis then you can expect regular cash-injections in your bank account, which in turn will surely improve the cash flow of your business. The cost of your goods too will again become competitive since the problem of double taxation will be eliminated with successful vat reclaims.

If you have already paid vat on capital goods, services or on regular import of goods then it is extremely important that you try to recover the vat tax amount that has originally been paid on the same. You should make the necessary efforts and go in for vat recovery for vat already paid on goods or services since successful recovery can certainly improve the bottom-line of your business.

Learn all about vat on postage to save money in your business

If you are a VAT registered trader in the UK that needs to use postage stamps and postal services on a regular basis then you should learn all about vat on postage to save money in your business. If you can meet certain conditions set up by HM Revenue and Customs or hmrc vat then you can surely treat your postal charges as reimbursements.

Once your taxable sales jump over the vat threshold limit set up by hmrc then you will have to apply for vat registration. Upon successful registration, you will turn into a vat registered trader and need to follow all uk vat rules as specified by hmrc. Many other eu countries too have adopted vat in a bid to ease cross border trading and increase their vat tax revenues. All eu vat rules are formed by the European Commission although each member country usually adapts those rules to suit their economy. In the case of postal charges, hmrc has defined their own rules that might allow you to reimburse some of your expenses and lower your business costs, provided you meet the criteria set up by them.

There are basically 3 vat rates applicable in the UK, Northern Ireland and the Isle of Man. The standard vat rate on most goods and services is 17.5%, which will rise to 20% from January 4, 2011. The reduced vat rate is 5% while certain goods and services attract zero vat rate. There are also specific goods and services that are vat exempt while some fall outside the purview of vat. As a trader you can usually recover previously paid vat although in cases of vat exempt goods or services it is a little difficult to file for vat reclaim.

As per the hmrc.gov.uk website that explains vat rates on various goods and services, vat on postage is split up into postal services and postal stamps. Postal stamps that are unused are exempt from any vat. Postal services that have been supplied by Royal Mail or any other licensed Postcomm operator too are exempt from any vat. However, any postage or delivery inside the UK where postage is charged separately such as mail order deliveries then the vat charged will be of the same percentage as that charged on the vat invoice.

Again, postage that is charged as an optional extra on delivery of goods will always attract the standard rate of vat. You can refer to notice number 700/24 of hmrc vat to learn more about applicable vat and conditions that need to be met if you want to claim postal charges as disbursements. You will however, be able to claim only on postal charges paid to Royal Mail or any other operator licensed by Postcomm. Different vat rules will apply if you send goods outside the UK or receive them from other eu countries that follow vat, or any other country in the world. If you are not sure on vat charges or reimbursements then you should contact your vat agent or consultant to stay on the right side of vat law.

If your business requires the use of postal services to a large extent then it can be profitable if you know about all applicable vat rules on postage. The hmrc vat department has several rules on vat on postage that need to be understood and followed before you can apply for reimbursement on your postal charges.

Study vat new build rules before building or renovating your home

If you reside in any EU country including the UK where VAT tax is applicable then you should study vat new build rules before building or renovating your home. If, for example, you live in the UK then there are several vat rules that apply to you or your contractor when you sign a contract or even build your own home.

It is Her Majesty’s Revenue and Customs or hmrc department that issues uk vat rules that are normally based on eu vat guide lines issued by the European Commission. If you plan to purchase a readymade home from a builder of your choice then you will not have to pay any vat on your new home since sales of homes are vat exempt in the UK. If you plan to build your own home on a plot of land with the help of a contractor then even though your contractor might be vat registered and pay vat on all purchases made for your home such as tiles, concrete, wood, etc, he or she cannot pass on the charge to you. Instead the contractor will need to issue zero rate vat invoices to you and claim back whatever vat has been paid by him or her on your project.

If you have decided that you will construct your new home all by yourself without the help of any contractor or sub-contractor then you will need to buy all the required material for your home all by yourself. Again, in such a case even though you will need to pay vat against all purchase invoices for material for your new build, you will be able to claim almost all that amount back from hmrc vat. You will need to preserve each vat invoice carefully as proof of having paid vat on them.

You should also hire a vat agent that is well-conversant with vat new build rules issued by hmrc. This will help you to avoid any misunderstanding while filing for vat reclaim since any mistake on your part could result in an unwanted vat audit by hmrc officers. There are also certain services and products for your home such as designing services, electrical appliances for your new home, certain kitchen units, etc that cannot be claimed back from hmrc. These vat rules for new build refer only for personal and domestic homes and are different from rules for people that engage in building new homes purely for commercial reasons or form part of their businesses. If you do have any doubts in your mind then you can visit the hmrc website that offers many vat online services other than simply helping the public by explaining each vat rule in detail.

You will also need to understand on which vat form to fill out while applying for a vat refund from hmrc. Again, if you have imported certain goods for your new build from any eu country that also follows vat and have been charged vat in the country of origin before those goods were imported into the UK then you will still be able to claim that vat amount back. Your vat agent would be able to guide you on all the relevant documents to be submitted with your new build reclaim forms. Once you have submitted all your documents to hmrc then you can expect a vat refund within 3 to 4 months.

If you plan to hire a contractor or build your own home in the UK then you will not need to pay vat for most goods and services while also be able to claim back vat already paid in the UK or even in any other eu country. You should, however, engage the services of an expert vat agent well-conversant with vat rates and reclaims on new buildings, construction, renovation, and conversion before you try to reclaim vat on your vat new build.

Submit relevant vat form to avail of various vat services

Most EU countries including the UK have shifted over to VAT or value added tax to boost tax revenues and as per specific vat rules you will need to submit relevant vat form to avail of various vat services. If your business is situated in the UK then you will need to physically visit HM Revenue and Customs or hmrc vat department or can even visit their website to download various vat forms, and can even submit some forms online itself.

If your business has surpassed the vat threshold limit of £70,000 in the past 12 months then you can start out by downloading the vat registration form from the hmrc website, although you can get registered for vat before reaching this limit too. In all, there are over 50 online forms connected to vat that can be downloaded from the website. If you are a small trader then you can easily fill up the registration form Vat 1 and submit it online itself. If, however, you are part of a group or a charitable organization, or a partnership company then you can download the relevant vat form 1A, 2, 7, etc but will need to fill it up manually before delivering it to the hmrc vat department.

In the UK, the hmrc vat department has a website that offers a lot of vat information to its viewers that include vat registered traders, vat agents and consultants, people that want to apply for vat registration or simply people that have several other queries related to customs duties, excise duties, and vat. If you want to turn into a vat registered trader in the UK then you will need to learn all about the various classifications under which your goods and services fall so that you can apply the right vat formula while buying and selling them. Hmrc vat department has 14,000 classifications that classify goods and services into standard vat rates, reduced vat rates, and zero vat rates.

Some goods and services also fall under the vat exempt range. Knowing the correct classification of each product will help your while making a vat invoice that will need to specify your vat number, the vat rates, vat amount, and all other relevant vat information required by hmrc. The same holds true while issuing vat invoices in any other vat enabled country in the eu. These details will again need to be mentioned in the corresponding vat return. Hmrc also offers several other vat online services including filing the vat return form online as well as applying online for vat refunds.

If your business requires imports of different goods and services into the UK then appointing a capable vat agent thoroughly conversant with eu vat and uk vat rules can help you to download the correct form and submit it without any errors. Such an agent will also help you to get a vat reclaim at the very first try itself, thus ensuring that your business gets a financial injection sooner rather than later.

In order to comply with all vat rules you need to ensure that each form related to vat is filled up and dispatched without any errors, and within the required time limit. You should certainly take full advantage of various online vat services offered by hmrc vat by downloading and submitting the right vat form so as to remain on the right side of the vat tax law.

Focus on increasing your sales by opting for vat flat rate scheme

If you are a trader in the UK with taxable sales of less than £150,000 then instead of getting bogged down while maintaining vat accounts in detail you should focus on increasing your sales by opting for vat flat rate scheme. This scheme allows you to charge a flat percentage of vat to your clients without the need to maintain detailed vat accounts.

Under standard vat accounting procedure you would need to pay vat to your suppliers and charge vat to your clients. Each vat invoice issued by you would also require you to show the vat rates and vat amount while the same would need to be shown in great detail in your vat return. However, if you are on the verge of breaking through the vat threshold limit of £70,000 in taxable sales within the past 12 months and you do not wish to get entangled in maintaining tedious vat accounts then opting for the flat rate scheme would be the best option.

Although you would be required to display the vat rate in your invoice, you would not be required to maintain a detailed account of how much vat you have charged on every single invoice. You would only need to submit your total taxable sales in the required period and pay a flat rate of vat over that amount. In addition, if you directly opt for the flat vat rate scheme in the first year of vat registration then you would also be entitled to a special discount of one percent from HM Revenue and Customs or hmrc vat department that collects vat from all vat registered traders and implements uk vat rules.

However, you can enjoy these benefits only until your sales touch £225,000 after which you will be compelled to exit this scheme and join any other applicable vat scheme. All these thresholds are slated to change from January 4, 2011, when standard rates of vat all across the UK increase from 17.5% to 20%. If, however, you have tried out this scheme in the previous 12 months or are part of a group or division, or have been convicted or charged for any vat offence then you will not be eligible for the vat flat rate scheme. There are also certain other factors that can compel you to remain outside this scheme.

While you can avoid maintaining vat accounts in great detail and also get a one percent discount to join the flat rate scheme, you will certainly lose out on revenue if you generally purchase standard rate goods or services as this scheme will not allow you to opt for vat refunds. If your turnover consists mostly of zero vat rate or VAT exempt sales then again this scheme is not suitable for your business. If you have normally received vat repayments while following the standard vat rate scheme then this too could stop once you switch over to the flat vat scheme. You should consult your vat agent and weigh all existing and future facts before you enter or shift into this scheme.

If you do not expect your business to rise rapidly in the near future then you should opt for a vat accounting scheme that is easy to maintain and takes up least amount of time and energy from your business. You should check all facts related to the vat flat rate scheme and opt for the same if both you and your vat agent come to the same conclusion that such a scheme is indeed right for your business model.

In matters of tax eu countries have mostly opted for vat

Introduced first in France in 1954, VAT or value added tax was slowly implemented in most European countries in the coming years and in matters of tax eu countries have mostly opted for vat. VAT is a taxation system that bypasses the perils of double taxation while also ensuring better adherence to tax payments.

Most countries around the globe usually depended on traditional sales tax systems as a means of collecting revenues through taxes. However, the system was not perfect and goods as well as services were taxed multiple times under this system. Vat is applicable every-time specified goods or services change hands and vat registered traders simply get back the paid tax amount when they issue a vat invoice to their clients and collect the tax back. Regular vat returns ensure that traders provide all vat details to their respective vat departments.

Most eu countries including Denmark, Greece, Sweden, France, Italy, Poland, Germany, Spain, Ireland, Hungary, the UK, Portugal, and Austria, among others have opted to remain with vat while other countries around the globe too have shifted to this method of collecting taxes on goods and services. Although vat rules differ slightly in various countries, most of them do remain similar in principle to other countries even though vat rates on similar items might differ.

Most eu countries including the UK have 3 basic vat rates that are charged whenever goods or services are sold. The standard rate of vat is what is usually charged on most goods and services, and these range between 15-25%. Other goods and services fall into the reduced vat rate of 1-5%, while a few others fall into the zero vat rate category. There are also certain vat exempt goods and services where no vat is charged and no vat can be claimed either. Each country has its own vat rate classifications where thousands of goods and services are segregated according to their vat rates.

Traders that want to follow the vat system need to turn into vat registered traders in their own country. This can be achieved by crossing the vat threshold limit set by their country. In this vat tax eu countries too have various threshold limits and traders might need to appoint a vat agent with good knowledge of eu vat and uk vat rules, especially if they import goods or services from member eu countries into the UK. Once a trader gets vat registration then the business will need to issue vat invoices mentioning vat rates clearly as well as file regular vat returns. However, any vat paid in another country could be claimed back by a trader by opting for vat refunds, which in turn would help avoid double taxation and provide a cash flow boost to the trader’s business.

Vat has been openly welcomed by most eu countries including the UK, and traders can quickly understand the system once they turn into vat registered traders. An expert vat agent on hand can also guide them during calculations and filing of vat returns so as to reclaim any previously paid vat. In matters of tax eu countries have mostly opted for vat and this unified system has helped many traders in such countries to quickly recover previously paid taxes.

While reclaiming vat ensure proper procedures are followed

If you have already paid vat on your goods or services more than once and want to receive the original amount back then while reclaiming vat ensure proper procedures are followed. You can use the vat refund scheme to get back vat that might already have been paid earlier so as to reduce your costs as well as get relief from the problem of double taxation over your goods or services.

Although you will not be allowed to deduct the VAT tax amount directly from your next vat return, you will still be allowed to claim that amount in a separate vat refund scheme. This scheme is available in the UK subject to certain terms and conditions. Most eu countries that follow vat usually have such procedures where vat amounts that have already been paid can be reclaimed. If you are a vat registered trader in the UK that does not have vat registration in the country of origin then you can claim any vat paid in that country provided you meet a few other vat rules.

You can also claim vat paid in another eu country if you have not got relief through any other vat scheme. You will need to use a standard vat reclaiming form through the HM revenue and customs or hmrc vat website that looks after the customs, excise and vat department in the UK. On the other hand, since the reclaiming rules might differ in other countries, you might need the services of an expert vat agent well-versed in uk vat and eu vat rules to successfully extract vat refunds from the relevant country. Your agent can act on your behalf once you provide them with a power of attorney or a letter or authority to do so.

You can go in for a vat reclaim no later than 9 months in a calendar year after you have paid the vat amount. You will first need to register your business name and your agent’s name too in case you plan on reclaiming vat through your agent. You should use the hm vat refunds service that is a part of the vat online services offered by the hmrc vat website so as to save on time and effort. Once you submit the required online vat form you will be issued an online reference number that will indicate that your request has been received by the vat refund department.

Although you will not need to send any paper documents, certain eu countries might ask for a scanned vat invoice to be attached to your vat refund request. Once you have sent your reclaiming request hmrc will send you a confirmation regarding the same within 15 days while the concerned eu country will normally provide you with a vat refund within 4 months, if all your documents are in proper order. In case any further information is required from that eu country then you can expect your vat reclaim to be settled after around 8 months of the original application.

In order to avoid the problem of double taxation, most eu countries that have adopted vat including the UK offer vat refunds that can be claimed by following proper procedures and using proper applications. You too can claim back vat paid in any other eu country that follows vat by reclaiming vat back from that eu country when you use the vat refund scheme.

Pay your customs duties and vat dutifully to hm customs vat

If your trading or manufacturing business requires importing goods into the UK then you should pay your customs duties and vat dutifully to hm customs VAT. The customs department is managed by hmrc or hm revenue and customs department which is responsible for collecting various duties and taxes while also managing several benefits and funds.

Hmrc was established in the year 2005 with the merger of hm customs and excise department with the inland revenue department. This department now collects duties such as customs duties, excise duties, import vat, sales vat, income tax, inheritance tax, corporation tax, capital gains tax and several other taxes. The hm customs vat department collects around £17 billion in the form of duties and taxes each year.

If your business involves importing goods from other countries including member eu states that have also implemented the system of vat or value added tax then there are several advantages that can be beneficial for your own business. However, these benefits can be booked only if you too are a vat registered trader in the UK. A systematic understanding or uk vat and eu vat rules will help you to reclaim any vat that might have been paid on any goods in the country of origin before being imported into the UK.

You will be charged customs duties by the hm customs department upon entry into the UK. If you import alcohol or tobacco products or engage in providing gambling services then you might have to pay excise duties. The duties or import vat that you pay will depend on the nature of the goods or services imported into the UK and the hmrc uses a database of 14,000 classifications to slot your imports into the relevant classification.

Once your vat registration is completed then you can sell your imported goods in the local market by charging the appropriate vat on those products or services. You will also need to file regular vat returns and could file for vat refunds for vat paid in the country of origin. This applies to vat already paid on products or on services utilized in another eu country. For example, if you have paid vat while taking part in a trade show in another country then you can claim the amount back.

The hm customs vat department also allows you to pay most of your taxes online while also allowing you to calculate customs and excise duties, and vat by providing online help. On your part, you should definitely go in for the services of an expert customs and vat agent for seamless imports of goods and services into the UK as well as for ensuring that your imports are all classified and paid for in the correct manner. The customs, excise, and vat department does not take kindly to mistakes or fraud, and you might find yourself in deep trouble in case you knowingly or unknowingly commit any errors.

If you plan to import goods or services into the UK then you need to ensure that you employ professionals that have complete knowledge on customs, excise and vat rules pertaining not only to the UK but also to the entire EU region. This will help you to calculate and pay your customs duties and vat dutifully to hm customs vat so as to run your business without any setbacks.