UK VAT Registration for Non UK Companies and Directors

The VAT registration threshold is £90,000. GOV.UK says you must register if taxable turnover for the last 12 months goes over £90,000, or you expect it to in the next 30 days. You must also register regardless of turnover if you and your business are based outside the UK and you supply any goods or services to the UK.

The first two rows are the ordinary rules, explained in VAT registration for a UK limited company. The last two come from VAT Notice 700/1 and the HMRC VAT Registration Manual. The threshold can change, so check the current GOV.UK page.

VAT Notice 700/1 defines a non established taxable person as any person who does not have a UK establishment. It says the registration threshold for taxable supplies does not apply to an NETP, so it has to register for VAT if it makes taxable supplies of any value in the UK, including supplies of digital services.

The notice then defines a UK establishment. In its words, a UK establishment exists if either the "place where essential management decisions are made and the business's central administration is carried out is in the UK" or the "business has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK".

The HMRC VAT Registration Manual adds that establishment is not defined in legislation for VAT purposes and is derived from case law. It tells HMRC staff to consider where the day to day activities and running of the business take place.

Not automatically. VAT Notice 700/1 says HMRC would normally consider a company incorporated in the UK to have an establishment in the UK as long as it is also able to make or receive business supplies at its registered business address. It then says a registered, serviced or virtual office alone is not enough to create a business establishment.

The HMRC VAT Registration Manual puts it more directly for its own staff. It says a third party UK address or a company incorporated in the UK will not by itself be sufficient to create a UK establishment, and that you would need to consider the extent to which the management and running of the business takes place in the UK.

The official wording gives a test, not an answer for every company. The notice also says that someone who has a place of business in the UK but lives abroad has a business establishment in the UK and is liable to register under the normal rules. Where your company falls depends on its facts, so ask an accountant or HMRC. Corporation Tax works on a different test; see UK Corporation Tax for non residents.

It depends on what you sell, to whom, and where the supply takes place. VAT Notice 700/1 says an NETP must register if it makes any taxable supplies in the UK, including digital services, but it also lists cases where an NETP may not need to be registered. GOV.UK makes online marketplaces liable for the VAT on certain sales.

• All your sales to the UK are zero rated. GOV.UK adds that an NETP can only get an exemption from registration if all of its taxable goods or services are zero rated.
• All your sales to the UK are made to a VAT registered business in Great Britain that accounts for the VAT using the reverse charge procedure. The HMRC manual says the reverse charge will usually apply when an overseas business supplies services to a UK business, with exceptions that include services supplied to a private customer.
• You are an overseas seller and all your sales to the UK are made through an online marketplace to non business customers.
• If all your sales to the UK are exempt from VAT, the notice says you are unable to register.

For goods, GOV.UK says the online marketplace is liable for the VAT where goods outside the UK are sold through it to customers in Great Britain in consignments valued at £135 or less. It is also liable for the VAT on goods of any value that are in the UK at the point of sale and sold by an overseas business through the marketplace. The overseas seller remains liable for any import VAT and Customs Duty when the goods are first imported.

GOV.UK says a seller must register and account for the VAT on a marketplace sale to a business customer who gives a UK VAT registration number. If your customers are all outside the UK, whether you make any UK supply at all turns on the place of supply rules, so ask an accountant.

GOV.UK says you can usually register for VAT online, and VAT Notice 700/1 says an NETP should use the HMRC online VAT registration service. For a limited company, HMRC asks for the company registration number, business bank account details, the UTR, details of annual turnover and an estimate of taxable turnover for the next 12 months.

1. 1

   Settle your status first

   Decide with an accountant whether the company has a UK establishment or is an NETP, because that sets the threshold, the deadline and the address HMRC registers you at.

2. 2

   Collect what HMRC asks for

   Company registration number, bank details, turnover figures and the company UTR. GOV.UK says you will also need information about Corporation Tax and PAYE.

3. 3

   Apply online and give the right address

   The notice says an NETP is registered at its principal place of business, which must be outside the UK and should not be a third party address such as a mail forwarding or registered office address.

4. 4

   Wait for the number

   You get a 9 digit VAT registration number by post. The notice asks you not to contact HMRC about an application until 40 working days have passed.

An NETP may appoint a UK VAT representative or an agent, and the notice says HMRC can direct an NETP to appoint a VAT representative or ask for a security.

Voluntary registration is for a business that is not liable to register because it is below the threshold. GOV.UK says you can choose to register with turnover under £90,000, and the notice says you can ask for the date to be backdated by up to 4 years. Once registered you must submit a VAT Return for every period.

GOV.UK says you usually send a VAT Return to HMRC every 3 months, even if you have no VAT to pay or reclaim. The deadline for submitting the return and paying HMRC is usually one calendar month and 7 days after the end of the accounting period. Returns must be sent with software compatible with Making Tax Digital.

• GOV.UK says HMRC signs a newly registered business up to Making Tax Digital for VAT unless it is exempt or has applied for an exemption.
• You must keep some VAT records digitally, and keep VAT records for at least 6 years.
• GOV.UK says HMRC can charge a penalty of up to £400 if you send a paper VAT Return and you are not exempt.

Paying HMRC from abroad is easier with a UK business account. Add the VAT dates to your UK company compliance calendar.

GOV.UK says that if you register late you must pay VAT on any sales made since the date you should have registered, and you might need to pay a penalty. VAT Notice 700/1 says HMRC registers you from the date you were liable, and you account for VAT from then even if you did not charge it.

For an NETP the notice says HMRC may register you without your agreement. The HMRC manual says an NETP that fails to register at the right time is subject to the normal penalty regime, that the failure to notify penalty is linked to the behaviour of the business, and that a business with a reasonable excuse may not be liable. The notice says a penalty for telling HMRC late could be equal to the amount of VAT you should have paid.