UK VAT Registration & Import Duty Advisory
VAT in the UK - Overview
VAT has become one of the most complex taxes and penalties for getting VAT wrong can be severe. Experience has shown us, that the most frequent tax queries international businesses have are high value transaction based VAT queries, where specialist knowledge is key to reducing risk. That’s why we have specialised in this area of tax.
VAT Advice
VAT registration
VAT Refunds claims
Filing periodic returns (VAT, Intrastat)
Manage HMRC inspections and enquiries
Importation Advice
VAT Registration for International Companies
The UK is one of the most popular locations for companies to expand to and offers many benefits.
VAT Registration in the UK – Why Overseas Companies need it?
VAT registration in the UK for foreign companies becomes relevant in several circumstances – particularly since the UK’s exit from the European Union. The most common reasons to obtain a VAT number UK:
- Import of goods: When goods are imported to the UK from outside the UK, VAT and import duties are incurred at the point of entry. VAT can be reclaimed if the importer holds a VAT number UK, and payments of import VAT can be delayed.
- Turnover threshold exceeded: Making sales of goods or services in the UK over the UK turnover threshold (£90,000 for UK-established businesses, £0 for foreign companies) will require a VAT registration.
- Stock held in UK: If stock is held in the UK and sold to UK customers (e.g. via Amazon FBA), you need to obtain a VAT number UK.
- E-commerce platforms: Where low-value goods (under £135) are sold in the UK by sellers from outside the UK, the e-commerce platform may be required to register for VAT and declare the output tax for these transactions on behalf of the seller.
- Services to UK customers: Certain cross-border services to UK customers also require VAT registration.
The advantages of VAT registration in the UK
VAT registration in the UK provides non-UK companies with following benefits:
Improved cash flow: VAT paid on purchases can be reclaimed via the VAT return every three months – without waiting for lengthy refund procedures. This significantly improves cash flow.
Professional company profile: A VAT number UK increases your credibility. Many UK suppliers only do business with VAT registered businesses.
Avoid penalties: Voluntary VAT registration ensures you don't inadvertently miss the registration deadline – avoiding costly HMRC penalties and mistakes.
Simpler VAT reclaims: With a UK VAT registration, foreign companies can reclaim VAT incurred on costs directly via the quarterly VAT return – instead of more costly and time-consuming refund procedures.
Earlier registration benefits: Registering voluntarily sooner can prevent missing the registration threshold and avoid expensive compliance issues.
How to register for VAT in the UK when your business is in
USA, Germany or France?
A foreign company can apply for VAT registration in the UK in a number of circumstances, although there are some circumstances when a VAT registration should not be applied for. One of these is where a non UK established company is making no supplies in the UK.
The VAT application form will ask a series detailed questions about the company and its trade and it is important that these are answered correctly with the help of a VAT professional. If the answers given, turn out to be incorrect and the foreign company should not have been granted a VAT registration in the first place, it will be in a very difficult position later.
What are the costs of registering for VAT in the UK?
The cost of VAT registration varies depending on the complexity of your case – in some instances, the tax authorities require additional information.
One-off registration fees: Paid only once; sound advice pays for itself over the years and helps avoid costly mistakes.
Ongoing costs: The cost of quarterly VAT returns depends on the complexity of your business structure and trading activities.
Fill in our contact form for a free, no-obligation quote – an advisor will get back to you shortly.
How long does it take to register for VAT in the UK?
The VAT registration processing time in UK is normally quite fast. Most time is taken to gather the information and deal with the formalities of the application. Once the VAT application has been submitted, the tax authorities may have additional questions, or require further information. It usually takes between three and six weeks for a VAT registration number (also called unique taxpayer reference or UTR in some contexts) to be issued to a non-UK company.
What are the VAT registration requirements in the UK?
For a VAT registration application, the UK tax authorities require detailed information about the business and how and where it trades. The company will have to supply details of whether it has an establishment in the UK, or whether it is trading from its non-UK head office in Germany, the USA or France for example. The applicant making the VAT application must be a director of the company and will need to supply personal identification information and details of previous and present UK VAT registrations with which they are associated.
What is the current VAT registration threshold?
Is there a minimum turnover for VAT registration in the UK?
The VAT registration threshold in the UK is Nil for non-UK established companies, but for foreign companies with a UK establishment the current turnover threshold is £90,000 in a 12 month period. There are complicated criteria for determining when a company must register for VAT and this is a general guideline. Therefore, in simple terms, if the foreign company has a UK establishments and crosses the VAT turnover threshold for goods or services that are VAT rated at 20%, 5% or 0% then it must register for VAT.
Before Brexit if a non-UK company was selling goods to UK private individuals this was called distance selling and the company had to apply for a UK VAT registration when the distance selling threshold of £70,000 was reached. The distance selling threshold has now been abolished in the UK and if you import goods to sell in the UK you must register for VAT.
There is no minimum turnover limit for a company to register for VAT. If there is an intention to make a supply in the UK, then a company can register for VAT. There are exceptions to being able to register for VAT and in some circumstances, it will not be possible.
What is the current VAT registration threshold
The VAT registration threshold in the UK is Nil for non-UK established companies, but for foreign companies with a UK establishment the current turnover threshold is £90,000 in a 12 month period. There are complicated criteria for determining when a company must register for VAT and this is a general guideline. Therefore, in simple terms, if the foreign company has a UK establishments and crosses the VAT turnover threshold for goods or services that are VAT rated at 20%, 5% or 0% then it must register for VAT.
Before Brexit if a non-UK company was selling goods to UK private individuals this was called distance selling and the company had to apply for a UK VAT registration when the distance selling threshold of £70,000 was reached. The distance selling threshold has now been abolished in the UK and if you import goods to sell in the UK you must register for VAT.
Is there a minimum turnover for VAT registration in the UK?
There is no minimum turnover limit for a company to register for VAT. If there is an intention to make a supply in the UK, then a company can register for VAT. There are exceptions to being able to register for VAT and in some circumstances, it will not be possible.
Frequently Asked Questions about the VAT registration in the UK
Yes, we advise companies on many aspects of VAT, which range from VAT registration advice and what a compliant VAT invoice should contain, to complicated international chain transaction structuring, which ensures VAT costs are minimised. We often come across situations where transactions have already taken place, when it becomes apparent that a VAT cost has been incurred. Often, this is very costly to resolve and could easily have been avoided if professional VAT advice had been sought earlier.
We also carry out VAT reviews to ensure the VAT liability of supplies is correct and whether there should be any restriction on VAT recovery. Although the review is not a full audit, it shows the tax authorities that the company is taking reasonable care in relation to its VAT affairs and gives the directors reassurance that they have complied with their responsibilities.
We also support companies who have been selected for a VAT inspection by the tax authority and we deal with the inspector on the company’s behalf. We advise on tax assessments and negotiate with the tax authority after the inspection has taken place.
We cover many specialist VAT areas such as international trading, property and construction, digital supplies, e-commerce.
Yes, many of the applications we process are made by non-UK residents. Often, they are directors of an international company, or of a subsidiary in the UK.
A VAT registration is voluntary if there is no requirement to register for VAT. For example, if the turnover threshold has not been reached yet, the company may have a choice of registering for VAT voluntarily. There are many benefits to registering voluntarily and many companies do.
VAT registrations are normally done online and a UK VAT registration application form can be obtained from us. Once it is completed, we will use the information to make the online VAT application. We will help you with any questions which you may have, as some of the information requested by the tax authority can be quite technical.
Yes, companies no longer need to have a UK bank account to apply for a VAT registration, but the tax authority will not make electronic VAT refunds to foreign bank accounts. We offer a client account service for receiving VAT refunds on behalf of clients who do not have a UK bank account, which solves this problem for our clients. However, most non-UK companies applying for a VAT registration will be trading in the UK and will have a UK bank account for these purposes already, or will be in the process of setting one up. It can often be a lengthy and complicated process for foreign companies to open a UK bank account and we can give you advice and assistance if you need it.
The Ultimate Guide for Starting Your Business in the UK
This comprehensive guide is your go-to resource for navigating the intricacies of starting a business in the UK with ease and confidence.
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