VAT and customs issues
VAT registration of non-established businesses in the UK
The UK has a VAT registration threshold of £85,000 for taxable turnover in a 12 month period (or £85,000 in the next 30 days) for UK businesses and UK incorporated businesses. Non UK businesses must register for VAT as soon as they make any taxable supplies in the UK. The UK has 3 VAT rates – 0%, 5% and 20%. More information can be found in UK TAX RATES. It is only possible for a non UK business to register in the UK if it sets up a UK limited company or has a fixed establishment in the UK (ie it has a property or people in the UK (human and technical resources) who can make key businesses decisions). VAT registered business submit VAT returns on a quarterly basis which can be varied depending on accounting years, although it is possible to submit on a monthly basis in some circumstances.
Importing goods into the UK
If you are importing goods into the UK as importer of record you will need an UK EORI number. Only owners of goods can recover Import VAT either through a UK VAT registration or through the Non Established Business claim procedure (see below). If supplies of imported goods are made to UK customers once they are imported it is likely that a VAT registration will be required. The UK overs Customs Simplification procedures such as Customs Warehouses, Temporary Admissions, Inward & Outward Processing Relief and Free Ports.
Obtaining a UK EORI number
Non established businesses wishing to import goods into the UK will need a UK EORI number either through a VAT registration procedure or through a temporary number.
Recovering UK VAT for non-established businesses
If you are not registered for VAT you may be able to use this scheme to reclaim VAT charged on imports into the UK or purchases of goods and services used in the UK. If you are registered for business purposes in a country outside the UK, you can use the scheme to reclaim VAT paid in the UK, provided that you are not registered for VAT in the UK (or required to be) and have no place of business or residence in the UK. You can recover VAT on goods and services purchased in the UK and on Imports of goods to the UK provided these are used for taxable business purposes. There is no maximum amount you can claim but claims must be for at least 3 months and not more than 12 months. You must make any claim no later than 6 months after the end of the ‘prescribed year’ in which you incurred the VAT. The prescribed year is the 12 months from 1 July to 30 June of the following calendar year, so you must make your application no later than 31 December.
Selling low value online goods to UK consumers
Since 1 January 2021 any non established business selling goods online in consignments less than £135 to UK consumers (B2C) will require to be VAT registered in the UK.
Key Contact
Iain Masterton
Iain Masterton is our VAT Director with 24 years experience working with Big 4, medium size firms and Chiene + Tait.
Iain and his team can provide advice on:
- VAT registration of non established businesses in the UK
- Importing goods into the UK
- Obtaining a UK EORI number
- Recovering UK VAT for non Established businesses
- Selling low value online goods to UK consumers
- Selling electronic services to UK consumers;
Iain is a member for AGN International’s Tax Task Force and regularly attends and speaks to AGN events around the world.
Iain’s interests outside work are making and recording music, travelling and history.