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Global Business Services

UK VAT
Information

Registration | Fees | Timeline

UK VAT Information

VAT was introduced in the UK in 1973 as part of admission to the European Union and applies to transactions that arise from sales of goods or services within the UK. UK has left the EU as of January 1st 2021, and is now free to set its own VAT rules and policies.

 

The UK has a standard VAT rate of 20%, however, it is also possible to apply for a flat rate VAT of 7.5% if your annual sales remain below £150,000.

 

The UK VAT system is regulated by HM Revenue and Customs and you can find plenty of information on UK VAT on the HMRC website. 

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When Should You Register?

If you are importing or selling goods in the United Kingdom you may be liable to account for VAT. Residents and locally established businesses may not be required to register or report VAT if they have not reached the VAT threshold, but can do so on voluntary basis.

It is compulsory to register for VAT if :

If you are importing or selling goods in the United Kingdom you may be liable to account for VAT. Residents and locally established businesses may not be required to register or report VAT if they have not reached the VAT threshold, but can do so on voluntary basis.

You may also need to register in other circumstances, depending on the type of goods/services you sell.

It is possible to apply for an exception if you can prove that you have gone over the threshold due to a special circumstance and you will not go over this threshold in future.

What Happens if you Register Late?

If you are importing or selling goods in the United Kingdom you may be liable to account for VAT. Residents and locally established businesses may not be required to register or report VAT if they have not reached the VAT threshold, but can do so on voluntary basis.

Frequently Asked Questions | FAQ

Question:
Can I use a VAT number from another company?

Answer:

No. Each VAT number is unique, you can only use a VAT number that has been issued to your company by HMRC.

Question:
What are the risks of using the freight forwarder's VAT number for customs clearance purposes?

Answer:

Firstly if multiple customers share the same VAT number for customs clearance, the quality and efficiency of delivery cannot be guaranteed. Furthermore, if the VAT number used for customs clearance and the VAT number on the customer's sales invoice do not match, then the import VAT paid to Customs Clearance cannot be deducted in the VAT during the VAT filing process. In cases where the VAT in the current period is less than the VAT amount paid for imports, the tax refund cannot be issued.

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Question:
What is the difference between VAT and EORI numbers?

Answer:

When goods are imported from outside of UK, HM Revenue and Customs will require an EORI number, and if the importer already has a VAT number, it needs to be activated by HM Revenue and Customs to become a valid EORI number. The EORI number is usually the 9 digits of the VAT number preceded by GB and followed by 000. The EORI number can also be applied for without VAT, but it needs to be applied for together with the information of the first shipment.

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