United Kingdom VAT Guide

United Kingdom

On this page you’ll find everything you need to know about UK VAT registration, Returns, Tax Representation and your legal obligations within the United Kingdom.

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Register for VAT in the United Kingdom

We offer a full representation service as your Tax Agent

Registration

Fill out simple forms and provide the required Identity documents and we'll do the rest

VAT Filing

VAT Filing

In the UK we file VAT returns Quarterly, simply send us your VAT report from your marketplace and we'll do the rest.

Audit & Assistance

Audit & Assistance

We act as your Tax Agent in the UK for handling all of your VAT obligations and assisting with audits and investigations where needed.

Professional Support

Professional Support

Support the way you need it. Our professional staff are ready to help when needed. We can arrange meetings with any of our offices around the globe.

Read through our handy information on registering for VAT in France

Based in the United Kingdom

In the UK you need to register for VAT if:

  • You store goods In the UK
  • You sell them to consumers based in the UK; and
  • Your sales exceed the UK domestic VAT threshold of £85,000

You may also need to register for VAT separately in other EU countries if:

  • You sell goods to consumers in other EU countries and exceed the thresholds.

Based in a different EU Country

You need to register for VAT in the UK if:

  • You store your goods in the UK or
  • You sell to UK-based consumers (non-business); and
  • Your sales exceed the UK distance selling VAT threshold of £70,000

Based Outside the EU

You need to register for VAT in the UK if:

  • You store goods in the UK
  • You sell goods to UK consumers from outside of the EU

You may also need to register for VAT separately in other EU countries if:

  • You sell goods to consumers in other EU countries.

Types of UK VAT

Rate Type
20% Standard
5% Reduced
0% Zero

Registering for VAT in the United Kingdom

Registration in the UK is generally one of the fastest in Europe, using the online application and providing the correct documents immediately will normally produce a VAT number in under 4 weeks unless further investigations are taken, further info is normally required for businesses outside of the EU to register.

There are a number of scenario’s that a business would be required to register for VAT in the UK which include;

  • You store goods in a UK fulfilment centre or warehouse
  • You are selling to UK consumers from another EU country and have exceeded the £70,000 Distance selling threshold
  • You sell to UK consumers from outside of the EU
  • Organising events in the UK

What are the United Kingdom’s VAT Thresholds

  • For EU VAT-registered companies selling goods over the internet to consumers in the United Kindom,(distance selling), the VAT registration threshold is £70,000 per year.
  • For foreign businesses trading in the United Kingdom that are VAT/GST/Tax registered in their home state, the VAT registration threshold is nil.
  • If you store goods in the UK, the registration threshold is nil and you should register before transferring stock

UK VAT Reporting

All UK VAT returns are filed quarterly,

Once registered, a business will be assigned to a “VAT stagger group”. The group assigned will determine the month in which VAT quarters end and when payments and VAT returns are due for submission. The three stagger groups are as follows:

  • Stagger group 1 – quarters ending March, June, September, December
  • Stagger group 2 – quarters ending April, July, October, January
  • Stagger group 3 – quarters ending May, August, November, February

 

 

UK VAT Schemes

There are a number of different VAT schemes available in the UK which may or may not suit your business.

UK Cash Accounting Scheme

Usually, the amount of VAT you pay HM Revenue and Customs (HMRC) is the difference between your sales invoices and purchase invoices. You have to report these figures and pay any money to HMRC even if the invoices haven’t been paid.

With the Cash Accounting Scheme you:

  • pay VAT on your sales when your customers pay you
  • reclaim VAT on your purchases when you have paid your supplier
  • To join the scheme your VAT taxable turnover must be £1.35 million or less.

UK Margin Scheme

The VAT margin schemes taxes the difference between what you paid for an item and what you sold it for, rather than the full selling price. You pay VAT at 16.67% (one-sixth) on the difference.

You can choose to use a margin scheme when you sell:

  • second-hand goods
  • works of art
  • antiques
  • collectors’ items

You can’t use a margin scheme for:

  • any item you bought for which you were charged VAT
  • precious metals
  • investment gold
  • precious stones

UK Flat Rate Scheme

The amount of VAT a business pays or claims back from HM Revenue and Customs (HMRC) is usually the difference between the VAT charged by the business to customers and the VAT the business pays on their own purchases.

With the Flat Rate Scheme:

  • you pay a fixed rate of VAT to HMRC
  • you keep the difference between what you charge your customers and pay to HMRC
  • you cannot reclaim the VAT on your purchases – except for certain capital assets over £2,000
  • To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC.

UK Annual Accounting Scheme

Usually, VAT-registered businesses submit their VAT Returns and payments to HM Revenue and Customs 4 times a year.

With the Annual Accounting Scheme you:

  • make advance VAT payments towards your VAT bill – based on your last return (or estimated if you’re new to VAT)
  • submit 1 VAT Return a year

When you submit your VAT Return you either:

  • make a final payment – the difference between your advance payments and actual VAT bill
  • apply for a refund – if you’ve overpaid your VAT bill

The scheme would not suit your business if you regularly reclaim VAT because you’ll only be able to get 1 refund a year (when you submit the VAT Return).

You can join the scheme if your estimated VAT taxable turnover is £1.35 million or less.

UK VAT Rates

  • 20% Standard – All other taxable goods and services
  • 5% Reduced – Children’s car seats; certain social housing; some social services; electricity, natural gas and district heating supplies (for domestic use only); some energy-saving domestic installations and goods; LPG and heating oil (for domestic use only); some renovation and repairs of private dwellings; some medical equipment for disabled persons
  • 0% Zero – Some social housing; printed books (including e-books); newspapers and periodicals; renovations to private housing (Isle of Man only); collections of domestic refuse; household water supplies (except distilled and mineral water); supplies of food and drink (some exceptions); take away food (if bought on the catering premises); cut flowers and plants for food production; prescribed pharmaceutical products; certain medical supplies for disabled persons; domestic passenger transport; children’s clothing and footwear; children’s diapers; live animals destined for human consumption; seed supplies; supply of animal feed; supplies of residential caravans and houseboats; some construction work on new buildings; some supplies of new buildings; sewerage services; motor cycle and bicycle helmets; commercial ship and aircraft stores; intra-community and international passenger transport; some gold ingots, bars and coins

Frequently Asked Questions

Obtaining a VAT number in the United Kingdom is normally quick, with the average business being VAT registered in under 4 weeks assuming the HMRC don’t want additional information or perform additional checks.

At this moment in time it is still unclear what changes will be implemented as part of the deal or no deal between the United Kingdom and the European Union. As of 1st January 2021 the UK will be classed as a Non-European country and have to follow similar import/export procedures into Europe as other countries such as America and China.

Some countries are likely to require UK businesses to appoint a Fiscal Representative in their country but nothing is set in stone.

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UK VAT Registration & Returns

Includes;
  • Registration
  • 4 Quarterly VAT Returns
  • Annual VAT Return
  • Amazon & eBay Approved Official Certificates
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£495per year plus VAT

UK VAT Returns

Includes;
  • 4 Quarterly VAT Returns
  • Annual VAT Return
  • Free Agent Change
  • Support and Advice
  • Covers VAT Schemes
from
£41per month plus VAT

UK Payroll

Includes;
  • Monthly Payroll
  • Maternity/Paternity Leave
  • RTI Submissions
  • Pensions
from
£8per employee per month

Bookkeeping For special enquiries contact us

  • Monthly Bookkeeping
  • Annual Accounts
  • Year End
  • Dedicated Accountant
  • VAT Returns