Introduction
UK VAT is a tax upon the supply of goods and/or services made
in the UK. Supplies made elsewhere in the world are not affected
by UK VAT. In general terms, it is the responsibility of the supplier
of goods or services to charge and account for the correct
amount of VAT on
a transaction. Non-UK businesses trading here can therefore have a
responsibility
to become UK VAT registered and comply with UK VAT law.
Which overseas
businesses making supplies in the UK can avoid VAT registration?
- Suppliers of most services to UK VAT registered businesses – here
the UK customer accounts for the VAT under what is known
as the reverse charge procedure.
- EC suppliers of most services to UK private customers – here
it is normally a requirement that the supplier charges VAT at
the rate
prevailing in their own state.
- Suppliers of most goods to
UK VAT registered businesses where the goods are delivered from
outside of the UK.
- Non-EC suppliers of most goods to private individuals
where the goods are delivered from outside EC.
- EC suppliers of
most goods to private customers where the value of supplies is
below the EC distance selling limit in the UK (currently, £70,000).
- Other
suppliers where the value of the supplies being made is below
the registration limit (currently £64,000).
WARNING: UK VAT law is a complex piece
of legislation that cannot be easily summarised on a web site
such as this. This brief guide is by necessity a simplification
of the rules and should not be relied upon in isolation.