How to register for VAT in the UK

When do I have to register for VAT in the UK?

The compulsory registration threshold for VAT in the UK is £83,000 of non-VAT exempt income per financial year.  The registration threshold for distance-selling into the UK is £70,000.  The threshold is based on the VAT taxable turnover, this means sales that are not exempt from VAT.  You would also need to register for VAT if you receive goods in the UK from the EU worth more than £83,000 or you expect to go over the threshold in a single 30 day period.

Who cannot register their business for VAT?

An entity cannot register for VAT if it does not meet the definition of a business stated by HMRC (please see the website for more information).  A business is also prohibited from registering if the business tends to sell goods or services that are exempt from VAT (i.e. insurance, education).

What is distance selling?

Distance selling occurs when a VAT-registered business in one EU country supplies and delivers goods to a customer in another EU country who isn’t registered for VAT. You are distance selling into the UK if:

  • You’re outside the UK but in another EU country
  • You sell goods to customers in the UK who aren’t VAT-registered
  • You deliver the goods or arrange for their delivery

Customers who aren’t VAT-registered include:

  • Private individuals
  • Some small businesses
  • Businesses that can’t register for VAT because their activities are exempt
  • Public bodies
  • Charities

Distance selling only involves goods, not services. It only takes place when a business registered for VAT in one EU country sells and delivers goods to someone in another EU country who isn’t, and doesn’t have to be, registered for VAT.

Physical presence?

Companies that do business with the UK, but don’t have a physical presence within the UK, will need to be able to demonstrate that they are making sales to the UK. As part of the VAT registration, HMRC would ask to see supporting evidence, e.g. sales invoices to customers, bank statements showing income received from UK clients etc.

Registration process

The easiest way to register and complete your VAT returns would be with the use of an agent i.e. accountant.

1Office can assist with the online registration once HM Revenue and Customs has confirmed the VAT registration details.  When HMRC approves the VAT registration they will also confirm the VAT reporting cycle.

What documents/information are needed to register for VAT?

In order to register for VAT you will need the following documents/information:

  • National Insurance (NI) number
  • Tax identifier i.e. Unique Taxpayer’s reference (UTR) number
  • Certificate of incorporation/incorporation details
  • Business bank accounts details
  • Information on all associated businesses within the last two years

When to file VAT returns?

In the UK, VAT returns and any payment due to HM Revenue and Customs (HMRC) can be submitted either monthly or quarterly. Usually VAT returns are completed on a quarterly basis.  All VAT returns need to be submitted online unless:

  • Your business is subject to an insolvency procedure – if you have a Company Voluntary Arrangement or an Individual Voluntary Arrangement you can submit your return online if you want to
  • You object to using computers on religious grounds
  • You can’t because of your age, a disability or because of where you live, eg you don’t have internet access

The deadline for submitting the VAT return online and paying HMRC are usually the same – 1 calendar month and 7 days after the end of an accounting period. This normally means that the 7th date of the second month after the end of the VAT accounting period is the deadline for HMRC to receive your payment.

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