The UK left the European Union on 31 January 2020. As part of its Brexit Withdrawal Agreement, it will remain inside the EU VAT regime until 31 December 2020. During this time, there will be no changes to UK VAT rules, treatment of transactions or filings. Read Avalara’s free 2020 Brexit guide for details on Brexit VAT and customs issues.

The United Kingdom VAT regime was introduced in 1973 as part of the UK’s admission to the European Union.  It is based on the EU’s VAT laws, known as EU VAT Directives, which are implemented into UK legislation as the Value Added Tax Act.  This Act, and subsequent amendments, set the rule for UK VAT registrations, compliance, returns, Intrastat, EC Sales lists and other related issues.

The UK VAT regime is operated by HM Revenue and Customs (HMRC).  It issues a wide range of publications on the administration of the UK VAT system.

If a non-UK company is importing, buying or selling goods in the UK, it may be liable to account for UK VAT.  This includes following all compliance and reporting obligations - see UK import VAT deferment account. There are now only a very limited number of situations where VAT registration is required of foreign companies who are providing services in the UK.

Should you register for UK VAT?

The UK may require foreign businesses to register for UK VAT in certain trading situations.  These include:

  • Importation of goods into Europe via the UK
  • Buying and trading goods in the UK
  • Selling goods to UK consumers through the internet, although there is a distance selling VAT registration threshold
  • Holding stocks of goods on consignment in the UK, prior to onward sale to other businesses in the UK or abroad
  • Organising live events and exhibitions with paid-for admission on the door
  • If a company is otherwise a non-VAT trader, but is receiving services in the UK under the reverse charge rule.
  • The self supply of goods.

The UK now seldom requires foreign companies to VAT register if it is only providing services.  This follows the European place of supply rules.

You can read more about UK VAT on our UK VAT compliance, VAT registration or other related briefings.

Need help with your UK VAT compliance?

Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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