UK – New VAT registration requirements

United Kingdom – New VAT registration requirements for overseas businesses

5th November 2012

Overseas businesses which sell goods and/or services in the UK will be required to register and account for UK VAT from 1 December 2012, regardless of the value of those sales.  The standard rate of UK VAT, which applies to most goods and services, is currently 20%.  The new rules apply to businesses which do not have a UK establishment for VAT purposes.  This is a significant change to the rules, which currently allow non-established businesses to sell goods and/or services in the UK with a value of up to £77,000 in any 12 month period, before having to register.  The changes are intended to bring the UK in line with European Union (EU) VAT law.

The new rules will effect a wide range of businesses.  In particular, non-EU businesses supplying services over the internet to UK private customers will be caught, as such services are treated as supplied in the UK.  Businesses making one-off or occasional sales of goods in the UK will also have to register, as well as those with more frequent UK sales.  However, sales of goods and services where the business customer is responsible for the VAT accounting (so called ‘reverse charge’ supplies) do not count.

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