- VAT REGISTRATION & RETURN
VAT Registration In UK
The UK maintains the basic structure of VAT that has been implemented across the EU (standard/reduced rates). In the UK, the standard rate is 20%. A reduced rate of 5% also applies for specific goods/services.
Non-resident VAT trading rules apply.
Overseas businesses must apply for VAT before trading, and to store any inventory in the UK.
Periodic returns must be submitted to the UK Tax Authority on a rolling 3-month basis.
If your annual turnover is less than £150,000, you may be eligible to apply for the Flat Rate Scheme.
UK VAT Registration
If your business trades taxable goods/services in the UK, or is intending to store inventory in a UK-based warehouse, you are required to register for VAT.
Applications must be submitted to the UK Tax Authority HMRC. You will need to provide documents to support your VAT application.
You can apply for the Flat Rate Scheme at the same time as your initial VAT application.
A fiscal representative is not required to apply for UK VAT.
UK VAT Rates & Exemptions
The standard VAT rate in the UK is 20%, and applies to most goods and services. The amount due is always included in the final retail price.
Rate | Type | Which goods or services |
20% | Standard | All others 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; motorcycle and bicycle helmets; commercial ship and aircraft stores; intra-community and international passenger transport; some gold ingots, bars and coins, women’s sanitary products. |
Additionally, some transactions are zero-rated and are therefore exempt from VAT. In the case that VAT is charged, the VAT paid can be reclaimed from the tax authority. This table is for guidance only. You should also refer to the appropriate tax authority for specific advice.
Flat Rate Scheme
If your annual turnover is less than £150,000, you may be eligible to apply for the Flat Rate Scheme (FRS).
Under the FRS, you may be able to pay a lower rate of VAT compared to what you collect from your customers. However, you won’t be able to reclaim any VAT on zero-rated transactions.
VAT Filing & Return Deadlines
1. VAT Filing Frequency
You’ll usually need to file a periodic return every 3 months.
2. VAT Filing Deadlines
The filing deadline is one month plus seven days after the end of the return period. Payment must also be made at the same time.
3. Ecommerce Selling
As an ecommerce business relying on distance sales, it can sometimes be difficult to determine your tax obligations. TBA Global can help you to ensure that you stay compliant, particularly as UK taxation rules begin to diverge from the EU.
VAT Services by Country
VAT Registration Process
Eligibility
Verify that you need to apply for VAT.
Fiscal Representation
Check whether you need to appoint a fiscal representative.
Submission
Submit your application, along with any supporting evidence.
Result
Receive and verify your VAT number.
Start Selling
Start business in your intended market!
Relevant Articles
Frequently Asked Questions
On average, it will usually take 1-3 months for the UK Tax Authority HMRC to process your application. However, as applications are processed on a case-by-case basis, and some applications may require additional supporting evidence to be submitted, this timeframe may be extended.
We would recommend waiting at least 3 months before following up with a status chase, as most VAT numbers are released within this timeframe.
The standard rate of VAT in the UK is 20%. Certain categories of goods are eligible for zero-rating, such as books/newspapers, and most food/drink products. An extensive list can be found here:
https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services
The Flat Rate Scheme allows businesses to pay a fixed rate of VAT based on their trading activity, even if they collect the full rate of 20% from customers. However, businesses using the Flat Rate Scheme will be ineligible to reclaim any VAT paid (input tax).
Businesses that have an annual turnover of less than £150,000 are eligible to join the scheme.
A C88 document is a standard format customs clearance document – this is equivalent to the ‘Single Administrative Document’ within the EU. Some shipment providers may provide their customs clearance documents in a different format.
A C79 certificate is issued by HMRC when an import is made with a valid UK VAT/EORI number. The certificate records the amount of import VAT paid within the specified period on the certificate, and serves as confirmation that HMRC has received the payment.
For input tax reclaims (import VAT), C79 certificates are preferable as they serve as both proof of importation and payment, since they have been issued by HMRC.
Otherwise, C88/customs clearance documents may be used in combination with the relevant commercial invoice(s) and proof of payment(s) to process a reclaim.
HMRC has launched a new digital platform called the Customs Declaration Service (CDS). One of the available functions on CDS is to obtain any C79 certificates electronically.
In order to do so, your CDS account must be linked to your UK VAT and EORI numbers.
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