Information for online retailers selling into the UK marks our fifth country-specific Essential Guide on what you need to know when selling online. This is focused on those companies based within the EU as well as those non-EU sellers selling into the UK.
Foreign companies can register for VAT in the UK without the need to form a local company.
Voluntary registration for VAT in the UK is also allowed if the seller advises their local tax authority in the first instance.
A non-EU company requiring a UK VAT registration does not need to appoint a fiscal representative unlike other countries such as France or Italy.
A VAT registration in the UK can take between four to six weeks to be issued.
The Distance Selling VAT Rules in the United Kingdom
An online seller selling from a EU country into the UK via a website or through the marketplaces directly to UK private customers, accounts for any VAT due on those sales in their own country, up to the set UK threshold of £70,000 (or equivalent). At this point UK VAT registration becomes obligatory. Once registered, UK VAT at the applicable rate (standard, reduced or zero-rate) needs to be applied to any sales.
Using Fulfilment Centres in the United Kingdom
Using fulfilment centres in the UK to store goods for sale to private individuals creates a taxable supply and triggers an immediate need to VAT register in the UK. There is no threshold to exceed.
VAT returns in the UK are usually submitted quarterly.
Alternatively, it is possible to subscribe to the Annual VAT accounting scheme. Regular payments have to be made to the UK tax authority, with only one VAT return is filed a year.
Intrastat Declarations are statistical returns required by the European Commission to monitor trade between the EU member states.
If turnover exceeds the Intrastat Declaration threshold (for arrivals in the UK the threshold is £1,500,000 and for dispatches £250,000) there is also an obligation to file monthly Intrastat Declarations as well as UK VAT returns.
Failure to comply with local VAT regulations can result in penalties and interest being applied by the UK Tax Authority. Please be aware the European tax authorities are becoming more proactive in searching for non- compliant online retailers. They have set up mutual co-operation with each other and they share data.
In the UK, penalties can vary from just a warning to 100% of the value of the VAT owed.
You can download a copy of our The Essential Ecommerce VAT Guide_UK to keep for future reference.
What to Do Now?
If you want to know more, or think you need to register in the UK, please don’t hesitate to contact us on:
01273 634594 or email email@example.com