The Essential VAT Guide For Online Retailers Selling Into The UK

Information for online retailers selling into the UK marks our fifth country-specific Essential Guide on what you need to know when selling online.   This is focused on those companies based within the EU as well as those non-EU sellers selling into the UK.

Foreign companies can register for VAT in the UK without the need to form a local company.

Voluntary registration for VAT in the UK is also allowed if the seller advises their local tax authority in the first instance.

A non-EU company requiring a UK VAT registration does not need to appoint a fiscal representative unlike other countries such as France or Italy.

A VAT registration in the UK can take between four to six weeks to be issued.

The Distance Selling VAT Rules in the United Kingdom

An online seller selling from a EU country into the UK via a website or through the marketplaces directly to UK private customers, accounts for any VAT due on those sales in their own country, up to the set UK threshold of £70,000 (or equivalent). At this point UK VAT registration becomes obligatory. Once registered, UK VAT at the applicable rate (standard, reduced or zero-rate) needs to be applied to any sales.

Using Fulfilment Centres in the United Kingdom

Using fulfilment centres in the UK to store goods for sale to private individuals creates a taxable supply and triggers an immediate need to VAT register in the UK. There is no threshold to exceed.

Reporting

VAT returns in the UK are usually submitted quarterly.

Alternatively, it is possible to subscribe to the Annual VAT accounting scheme. Regular payments have to be made to the UK tax authority, with only one VAT return is filed a year.

Intrastat Declarations

Intrastat Declarations are statistical returns required by the European Commission to monitor trade between the EU member states.

If turnover exceeds the Intrastat Declaration threshold (for arrivals in the UK the threshold is £1,500,000 and for dispatches £250,000) there is also an obligation to file monthly Intrastat Declarations as well as UK VAT returns.

Penalties