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VAT

Will my company be automatically registered for Value Added Tax?
No, in the UK a VAT number is not allocated automatically like in most parts of Europe. A business doesn't have to register for VAT if its turnover does not reach £64,000 although you can apply voluntarily. Once your turnover will reach or has reached £64,000 you must apply for a VAT Number.

How do I apply?
We are able provide you with a VAT registration service in-house. We will process the application and submit to HMRC; although the final decision remains on the HMRC we will try our best to make sure you get you VAT Number. It takes about 6 - 8 weeks to get an answer from the authority.

What happens after I receive my VAT number?
You will charge VAT to your clients and will have to make a declaration mostly quarterly but it can also be done monthly or yearly.

When I should pay for any VAT liability?
Let assume your VAT period is quarterly Jan to March; you will need to submit your VAT return on the 30th of April and also if you have any VAT Liability due it must be paid before this date.

When VAT applied?
Once you are registered for VAT you should charge all you clients VAT but there are circumstances where VAT will not apply.

Clients in UK – You should charge VAT unless you deal with exempt services or goods

Clients in rest of EU – If you clients have a VAT number and once they have provided you with the Number you should not charged VAT under the EU law 6th Directive Article 28 – VAT Simplification. Also important to know that if you are working permanently in an EU country you may be required to register there also. If they don’t have a VAT number then you should charged VAT.

Clients outside EU – No VAT should be charged.

There are other points that you should take into consideration such as place of supply, place of consumption. For more details please contact us.

Can I claim input VAT which was paid before I got my VAT Number?
You can treat as input tax the VAT on goods which you obtained or imported before you were registered if:

GOODS

• the goods were supplied to the person who is now registered for VAT;
• the goods were supplied not more than 3 years before the business was registered (however, this condition does not apply if the business was registered before 1 May 1997 and you have not yet made the first return);
• the goods were obtained for the business which is now covered by the VAT registration;
• you still hold the goods or they have been used to make other goods which you still hold; and
• You compile a stock account of the goods.

This must show the quantities of goods and the dates when you obtained them. If you used any goods to make other goods, or disposed of them after you were registered for VAT, the account must give details, with dates.

SERVICES
You can treat as input tax the VAT on services which you received before you were registered if:

• the services were supplied to the person who is now registered for VAT;
• The services were received for the purposes of the business which is now covered by the VAT registration and related to its taxable activities. (If the services related partly to such taxable activities and partly to other activities, you must work out what proportion of the use of the services related to the taxable activities);
• The services were received not more than 6 months before you were registered;
• The services were not related to goods which you disposed of before you were registered (such as repairs to a machine which was sold before registration); and
• You compile an account of these services.

This must describe the services and the dates when you received them. If the services related to goods which you disposed of after you were registered for VAT, the account must give details, with dates.

SERVICES FIDES PARTNERS CAN HELP YOU WITH ARE:

• UK Company Formation
• Incorporating Holding companies
• Offshore Company Formation
• Accountancy Services
• Business Start up Services
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• Outsourcing
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