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 whenever 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 out so that your net cost doesn’t increase.

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. Alternatively, you might also have received such services in the UK itself vatcheck.com/vat from the supplier situated in a eu country. Every one of these factors would turn out increasing your expenses as you could end up paying vat on certain services including those linked to land, property, intra EC-freight services, as well as 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 expertise 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 help 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 can reclaim vat already covered specified services while filing your vat returns itself. If you are in the UK then you will need to calculate and indicate how much paid in Box 1 of the vat return form. You’ll then have to specify the same amount in Box 4 of the return to ensure the amount stands cancelled. You’ll have to specify the total amount 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 any vat paid in the foreign country to sterling before you fill out 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 become a vat registered trader, your taxable sales need to cross over ?70,000 in the previous 1 year although you may 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 from 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 are not really hard, it is always preferable to opt for the services of proficient vat agent that can handle all your vat requirements seamlessly. This will likely enable you to concentrate on boosting 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 way of a foreign company within or outside the UK.