Early VAT registration required for non UK traders

Back to all news

Early VAT Registration Required for Non UK Traders December 2012

From 1st December 2012 businesses not established in the UK will have to register for VAT as soon as they start to trade here instead of being able to wait until their taxable turnover reaches the VAT registration limit – currently £77,000.

This change does not affect the position where the UK customer accounts for VAT using the reverse charge mechanism nor does it impact adversely on the distance selling arrangements that can apply to EU suppliers who sell products directly to UK customers.

The existing place of supply rules have not been changed and so the impact may be fairly limited.   Any non established taxable person (NETP) will no longer be able to take advantage of the registration threshold and those already making supplies here will need to notify HMRC of that by 30th December 2012 and are required to be registered with an effective date of 1st December.

Similar requirements are going to apply to all EU countries rather than varying country by country.  Any UK based business making supplies that are deemed to be taking place in another EU country, e.g. a land related service, may find there is an obligation to become registered for VAT in that country much sooner than previously required. 

For further advice on this subject please, contact us.