VAT registration in the UK – What is VAT registration?

UK VAT Registration

What exactly is VAT registration?

VAT registration in the UK is legally required when your taxable turnover is more than £85,000.

Do I need to register for VAT?

In the UK, you will need to register for VAT if your VAT taxable income goes over £85,000 or you know it will. You may also register for VAT when your VAT taxable turnover is the total of everything sold that is not VAT exempt.

Compulsory registration

You must register for VAT if your business had a VAT taxable income of more than £85,000 over the last 12 months and if you expect your VAT taxable turnover to be more than £85,000 in the next 30-day period. You might also need to register in some other cases, depending on the kind of goods or services you sell and where you sell them. 

How do I know when to register for VAT? Here’s a short example:

So, on 1 June, you realise that your VAT turnover in the next 30-day period will take you over the threshold. You are then required to register by 30 June. Your effective date of registration will be 1 June.

What happens if you sell goods or services that are VAT exempt?

You will need to register if you only sell goods or services that are exempt from VAT or out of scope, but you buy goods for more than £85,000 from EU VAT registered suppliers to use in your business.

UK VAT threshold for distance selling

You are required to register for UK VAT if the value of the distance sales you make to the UK crosses the VAT registration threshold. The current UK VAT threshold for distance selling is £70,000. If you distance sell excise goods such as tobacco and alcohol, you will have to register for UK VAT and excise duty regardless of how much your sales are worth.

VAT requirements for storing goods in the UK

If you store goods in the UK and your business is based outside the UK, you are required to pay VAT.

UK VAT registration requirements for non-UK businesses

Foreign companies may register for VAT in the UK without the need of having a company in the UK, this is usually known as non-resident VAT trading. Foreign companies must register for UK VAT immediately if they are providing taxable supplies. And that’s not all, companies that sell goods over the internet to consumers in the UK, the VAT registration distance selling is £70,000 per annum. Send us an email or contact us if you need VAT registration in the UK, EU or outside EU.

Late registration

If you register late, you must pay what you owe from when you should’ve registered and you may get a penalty depending on how much you owe and how late your registration is.

How do I register for VAT in the UK?

You can either appoint an accountant to submit your VAT returns and deal with HMRC on your behalf or you can do it yourself.

What do you get when you register for VAT?

You will get:

  • Your VAT number.
  • When to submit your first VAT return and payment.
  • Your effective date of registration – this depends on the date you went over the threshold or the date you asked to register if it was voluntarily. 

What to remember?

From your effective date of registration, you must:

  • Pay any VAT due to HMRC.
  • Submit VAT returns.
  • Charge the right amount of VAT.
  • Keep VAT records and account.

Need help with UK VAT registration?

Contact us today and we will help you get your UK VAT number and deal with HMRC on your behalf.

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