United KingdomManual

The UK has a standard VAT rate and one reduced VAT rate. In addition, a number of items are zero rated

UK VAT registration: Everything you Need to Know

This comprehensive guide provides an in-depth look at UK VAT registration. Whether you're a domestic or foreign business, understanding how to get a UK VAT number is crucial for legal compliance and smooth business operations in the UK.

Registering for VAT in the UK

Registering for VAT in the UK is a necessary administrative step for businesses that wish to charge VAT on their invoices and submit VAT returns. Beyond legal compliance, there are benefits and implications for getting a UK VAT number. Some businesses are mandated to register due to the nature of their activities, while others opt for voluntary registration.

Who Needs a UK VAT Number?

UK businesses must register for VAT if they exceed the VAT registration threshold, currently set at GBP 85,000. A UK VAT number becomes obligatory if:

  • Your total VAT taxable turnover for the past 12 months exceeds GBP 85,000, or
  • You anticipate that your turnover will surpass GBP 85,000 in the next 30 days.

Non-UK businesses must register for VAT immediately upon making a taxable supply in the UK. Registration thresholds are not applicable to foreign businesses. Here are some common
taxable transactions:

  • Domestic supply of goods where the reverse charge doesn't apply.
  • Certain services supplied by foreign businesses that require UK VAT.
  • Import: Importing goods into the UK often requires a VAT number and an EORI number before importation. The EORI number must be issued by HMRC before the import takes place. EU EORI numbers are not valid since 2021. There are several simplifications in customs procedures in the UK, so we recommend checking the exact administrative obligations of your planned activity with one of our experts
  • Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
  • Supplies of goods sold online by a foreign seller will require a VAT registration when the goods are in the UK at the point of sale. For example, if you store your products in a UK warehouse (eg. Amazon FBA program), you will need to register for UK VAT.
  • Supplies of goods sold online. Check the section about UK VAT rules on e-commerce.

In case you are a non-established business incurring UK VAT but not making any taxable transaction, it is possible to claim the VAT incurred using the form VAT65A and the process foreseen by HMRC for non-VAT registered businesses.

You can read more about the obligation to register for VAT in the notice published by HMRC about who should register for VAT. Section 8 in this notice covers non-established companies.

Voluntary VAT Registration in the UK

While UK businesses can voluntarily register for VAT even if they don't meet the GBP 85,000 threshold, foreign businesses are generally not allowed to do this.

Benefits of Getting a UK VAT Number

Having a UK VAT number allows you to reclaim VAT on business-related expenses and imports. Additionally, you can benefit from postponed VAT accounting mechanisms, allowing you to defer your VAT payments.

Read more about postponed import VAT accounting in our detailed guide.

Required Documents for UK VAT Registration

Domestic companies need to provide the following:

  • Company details
  • Company Registration Number (CRN)
  • Unique Tax Reference (UTR) number
  • Information on Corporate Tax, PAYE, and self-assessment 

Foreign businesses must provide:

  • VAT certificate from their home country
  • Excerpt from the Trade Register
  • Passport copies of legal representatives
  • Proof of UK business activities

Step-by-Step Guide to UK VAT Registration

Here's a simplified step-by-step guide for foreign businesses: 

  1. Marosa will send you an information request. This is the list of information and documents required to proceed with the registration preparation. 
  2. Provide English translations of supporting documents.
  3. Marosa will complete the online registration form and set up your HMRC account.
  4. Sign and return necessary proxy for Marosa.
  5. Marosa submits the form online together with the supporting documents.
  6. We may have to respond to additional queries from HMRC.
  7. Receive the VAT certificate, typically sent via post.

The process is similar for UK businesses but requires different supporting documents.

UK VAT number format

The UK VAT number has various formats:

  • Standard: GB999 9999 99
  • Branch Traders: GB999 9999 99 999
  • Government Departments: GBGD999
  • Health Authorities: GBHA999

Do I need a Fiscal Representative in the UK?

Fiscal representation is generally not required for either domestic or foreign businesses in the UK. Unlike other countries in Europe, foreign companies can register directly for VAT in the UK.

Exceptions may apply for countries without tax information exchange agreements with the UK.

You can find more information about fiscal representative requirements in our overview of fiscal representative obligations in Europe.

How Long Does It Take to Register?

Receiving a UK VAT number usually takes around 30 days but can extend up to 2-3 months due to increased scrutiny by HMRC.

According to the HMRC recommendation, although you cannot include VAT on your invoices while waiting for your VAT number, you can increase your prices to account for the VAT that you will need to pay to HMRC.­ Find more information here.

Choosing a VAT Accounting Scheme

The standard scheme is commonly used, but businesses can opt for specialized schemes like the VAT flat rate, annual accounting, cash accounting, or Tour Operators' Margin Scheme (TOMs).

Contact us today!

Still have questions about UK VAT registration? Our VAT experts are here to help.


UK VAT groups

The UK has one of the most flexible and broader VAT grouping regimes in Europe. Two or more resident UK businesses can apply (not mandatory) to create a VAT group. These companies must satisfy the "common control" test and tax avoidance conditions set in section 43A of the VAT Act. A VAT group is treated in the same way as a single taxable person. Intra-group supplies are disregarded for VAT purposes and every member is jointly and severally liable for VAT liabilities of any group member. The same VAT number is granted to all members of the VAT group.

To apply for a VAT group in the UK, you must complete forms VAT 50 and VAT 51. Further information about the application process and VAT group conditions is available in the guide published by HMRC.

UK consignment and call-off stock

As a consequence of Brexit, the UK no longer applies a simplification on call-off stock or consignment stock activities.

Before Brexit, it was possible for the supplier to avoid a VAT registration in the UK using the EU and local simplifications available for this activity. However, as of 2021, it is mandatory that the supplier imports the stock in the UK and clears customs in order to have these goods entering the UK territory. VAT on these imports will be recoverable via the VAT return. The subsequent sales of these products to a local business will be treated as a domestic sale on which the supplier will need to account for VAT.

Likewise, UK businesses moving their stock into other EU countries will need to register for VAT in the EU country of arrival because the simplifications are normally foreseen only for intra-Community movements.

If your business is affected by the new rules on consignment or call-off stock and you need help registering for VAT or evaluating your VAT needs in UK, contact one of our experts to get help.  


Bad debt relief in the UK

The UK has a rather easy bad debt relief regime in comparison with other EU countries. VAT amounts that are not collected from the customer but have been paid as output VAT to the tax authorities can be recovered when a) six months have passed since the issuance of the invoice, b) the debt was written off in the business accounts, c) the value of the supply does not exceed the arm's length price on that supply and d) the debt was not sold or factored under a valid legal assignment.

There are no additional formalities (e.g. no credit notes, corrective returns, or letters to the authorities are not required). VAT on bad debt can be claimed directly in the next VAT return once the conditions have been met.  

Check the UK tax authorities VAT notice on bad debts to know more about how to recover VAT on unpaid invoices.

UK import VAT accounting

If you import goods in the UK, you can pay import VAT with a simplified mechanism called postponed import VAT accounting.

You will still need to comply with administrative requirements such as getting an EORI number or completing customs declarations. 

What is import VAT accounting?

Import VAT accounting allows you to pay and deduct VAT simultaneously in your VAT return.

Normally, import VAT is paid to the tax authorities upon importation of the goods.  The importer will then be able to claim back that import VAT via the VAT return. The time lapse between the payment of import VAT at importation date and the effective recovery at VAT return submission date (or refund date) has negative cash flow implications for the importer.

With postponed import VAT accounting, you can pay and deduct VAT at the same time in your VAT return. You will declare import VAT as payable in box 1 and include that same amount as deductible in box 4. Effectively, this means no cash-flow implications on your import VAT as fully taxable business.

When can I use import VAT accounting in my VAT return?

You can use this scheme if you bring goods from abroad in the United Kingdom and you will use these goods for business purposes as part of your company's activity.

It is important that you include your VAT number in the customs declaration. You should also get an EORI number.

You do not need pre-approval from HMRC to declare and pay import VAT in the VAT return. You only need to indicate that you are using this simplification in your customs declaration.

En algunos casos, es obligatorio utilizar la contabilidad del IVA de importación. Si importa mercancías entre el 1 de enero y el 30 de junio de 2021 y a) retrasa su declaración de aduanas ob) utiliza una declaración de aduanas simplificada, debe utilizar este esquema para contabilizar el IVA de importación.

Si es una empresa no constituida, deberá designar un representante indirecto y comunicarle que está utilizando la contabilidad del IVA de importación aplazada.

Irlanda del Norte está excluida del territorio del Reino Unido a efectos del IVA, por lo que debe seguir reglas diferentes si sus productos llegan a Irlanda del Norte.

¿Cómo completar tu declaración de IVA con contabilidad del IVA de importación?

Al utilizar la contabilidad del IVA de importación, debe completar las siguientes casillas en su declaración de IVA:

  • Casilla 1: Importe del IVA de importación, junto con el resto del IVA total adeudado
  • Casilla 4: Importe del IVA de importación, junto con el resto del total del IVA deducible
  • Recuadro 7: Valor total de tus importaciones, junto con el resto de tus compras totales (valor neto). No debes incluir ningún IVA en esta casilla.

Existen reglas especiales si utiliza contabilidad de caja, declaraciones de aduana retrasadas o si está en el régimen de tarifa plana para pequeñas empresas.

Puede leer más información sobre cómo completar su declaración de IVA con contabilidad de IVA de importación pospuesta en el manual publicado por HMRC sobre este tema.

Depósito aduanero y depósito de IVA en el Reino Unido

El Reino Unido tiene diferentes depósitos aduaneros; sin embargo, no existe un depósito de IVA específico para mercancías que ya han pasado por la aduana (productos T2).

En el Reino Unido existen los siguientes depósitos aduaneros:

  • Almacén de Aduanas e Impuestos Especiales : Suspende todos los impuestos, gravámenes y derechos sobre las mercancías T1 y T2 dentro de este almacén.
  • Depósito de impuestos especiales : Sólo pueden beneficiarse de este régimen los productos T2 (en libre práctica en la UE) sujetos a impuestos especiales, como el alcohol, el tabaco o determinados minerales. Encuentre más información aquí .
  • Depósito aduanero : Aplicable únicamente a las mercancías T1, excluyendo las mercancías sujetas a impuestos especiales. Estas mercancías también deberían estar sujetas a derechos de aduana.
  • Depósito fiscal : Sólo se permiten determinadas mercancías en los depósitos fiscales. No se permiten productos al por menor. Encuentra más información aquí .

Contabilidad de caja en el Reino Unido

La simplificación de la contabilidad de caja es posible en el Reino Unido. Las empresas con una facturación anual inferior a £1.350.000 pueden solicitar la contabilización del IVA en todos los suministros cuando se reciba el pago. De manera similar, el IVA soportado sólo se reclama sobre la base de la factura pagada y no de la factura recibida. Si forma parte de este plan, no es necesario que lo abandone hasta que su facturación alcance £1.687.500.

Puede encontrar más información sobre la elegibilidad y el proceso de solicitud en el sitio web de las autoridades fiscales del Reino Unido.

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