When the United Kingdom broke away from the European Union in 2021, all hell broke loose from a VAT and customs perspective. Suddenly the country was no longer part of the customs union, which meant that the movement of goods between the UK and EU became much more complicated.
For all businesses trading with the UK, there were also new VAT compliance rules to consider, as the country updated its legislation to be independent of the EU, but also mirrored a lot of the EU VAT framework.
UK VAT Compliance – Rates & Registration
If a company not established in the United Kingdom is providing ‘taxable supplies’ of goods or services in the UK, it may have to obtain a non-resident VAT registration. Foreign traders are legally obligated to register for VAT in certain circumstances in order to report taxable transactions and declare VAT that must be charged. It is important that all businesses with any commercial activity in the UK assess their compliance obligations and register prior to commencing taxable transactions if applicable.
Have a look at our Brexit Page to learn more about the specific VAT implications of Brexit.
When do I need to Register for VAT in the UK?
There are various scenarios that would trigger an obligation to register for VAT in the UK.
Some of the most common examples are:
- Importing goods into the UK where your business acts as the importer of record.
- Buying and selling goods in the UK.
- Selling goods from the UK which are delivered to customers outside of the UK (business or private customers).
- Holding inventory in the UK for sale, distribution or consignment.
- Drop shipping goods valued below £135 to customers in the UK.
- Organising events in the UK where attendees or delegates must pay admission.