VAT registration for non-UK businesses
This is an important reminder for overseas businesses that sell goods or services in the UK. The VAT registration rules changed for overseas businesses on 1 December 2012. The new rules removed the VAT registration limit (currently £79,000) from businesses which are defined as ‘non-established taxable persons’. This means that overseas businesses that make taxable supplies of goods or services to the UK must register and account for VAT in the UK regardless of their level of sales.
This change particularly affects non-established businesses making one-off supplies of goods in the UK. Overseas businesses that make taxable supplies over the annual VAT registration limit should already be registered for VAT in the UK.
Businesses making VAT exempt supplies or supplies which are made under the reverse charge procedure will not normally be impacted by this change. Businesses that are liable to register and fail to do so within the normal time limits may be subject to late registration penalties.
This change was brought about by a decision of the European Court of Justice which confirmed that only businesses established in an EU Member State can benefit from its domestic VAT registration threshold.