Foreign businesses VAT registration FZCO Accountants

Do foreign businesses need to VAT registration in UK?

VAT registration in the UK

Foreign businesses may register for VAT in the UK without the need to form a local company. This is known as non-resident VAT trading. Foreign businesses must register for UK VAT immediately. If they are providing taxable supplies. There is no longer any non-resident VAT registration threshold. EU and non-EU businesses permit to register for VAT in the UK . There is not need to appoint a local fiscal representative.

 There are strict rules on the situations where a registration is permit. Common scenarios which require a UK VAT registration include:

  • importing goods into the EU via the UK
  • buying and selling goods within the UK
  • holding goods in a warehouse in the UK as stock
  • selling goods from the UK to other EU countries
  • acquiring goods from other EU countries into the UK
  • distance selling to private individuals in the UK from another EU country, e.g. internet retailing.

When don’t I need to register for VAT?

The VAT registration threshold in the UK is Nil for foreign businesses established companies. But for foreign companies with a UK establishment the current turnover threshold is £85,000 in a 12 month period. There are complicated criteria for determining when a company must register for VAT. This is a general guideline. Therefore, in simple terms, if the foreign businesses has a UK establishment and crosses the VAT turnover threshold for goods or services. It means VAT rate 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. 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 . If you import goods to sell in the UK you must register for VAT.

How to UK VAT registration for  foreign  companies?

Foreign businesses 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. It is trade related and important that these are answered correctly with the help of a VAT professional. If the answers given, turn out to be incorrect. The foreign company should not have been granted a VAT registration in the first place. It will in a very difficult position later.

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 number to be issued to a non-UK company.

Buy goods from outside the EU

Whether you’re VAT registered, or not. You’ll have to pay VAT on any goods or supplies bought from countries outside the EU. These call imports and UK VAT rates apply. The bonus of being VAT registered is that you can then reclaim this ‘outside purchase’ as input tax on your tax return.

How do I report?

Most business report online either by their Government Gateway login, or through their accountant’s agent login. We make these submissions electronically, which is a requirement for complying with the UK’s Making Tax Digital rules for tax filings.

VAT amount payment

Payment needs to make at the same time that the return is submitted. If a repayment is due, filing online and ahead of the deadline means the refund should arrive reasonably quickly either by cheque or bank transfer, depending on which option you have.

UK VAT refunds

If foreign businesses is not making taxable supplies in the UK but is incurring UK VAT on local goods or services, then the VAT may recover through a VAT reclaim.