UK VAT Guide

If you're selling goods or services in the UK, understanding VAT (Value Added Tax) is crucial for your business. This guide walks you through everything you need to know about registering for UK VAT, staying compliant, and meeting your filing obligations.

Who Needs to Register for UK VAT?

You need to register for UK VAT if:

• Your UK taxable turnover exceeds £90,000 in any 12-month period

• You're a non-UK business making any taxable supplies in the UK (no threshold applies)

• You want to reclaim VAT on business purchases (voluntary registration)

Important: Non-UK businesses have no registration threshold - you must register before making your first UK sale.

VAT Registration Requirements

Documents You'll Need

To register for UK VAT, gather these documents:

• Certificate of Incorporation or Trade Registry excerpt - original or certified copy

• Bank account details - UK or international bank account accepted

• Legal representative ID or Passport

• VAT/GST certificate from your establishment country

• Business licence (required for sole traders)

• Proof of business address - utility bill, lease agreement, or bank statement

• Proof of business activity - shipping contracts, inventory screenshots, stock ownership proof, purchase invoices, or FBA screenshots

Timeline: Expect 8-12 weeks for registration to complete

Quick tip: Start gathering documents early - incomplete applications cause delays.

Taking Over an Existing VAT Registration

If you're acquiring a business with an existing VAT number, you can transfer the registration.

Transfer Requirements

• VAT certificate - copy of the existing registration

• Government Gateway account details for digital services access

• Timeline: 4-12 weeks for transfer completion

Special Considerations for Your Business

Non-UK Businesses

• Fiscal representation is optional - you can register directly with HMRC

• Consider appointing a fiscal representative if you need local support

• HMRC may require fiscal representation if you have compliance issues

Making Tax Digital (MTD) Compliance

• Mandatory for all VAT-registered businesses

• You must use MTD-compatible software for record keeping

• Digital links required between your software systems

• New registrations are automatically enrolled

Important: Late registration can result in penalties starting at £50, rising to £500 plus 10% of VAT due.

VAT Filing and Payment Deadlines

Your filing frequency depends on your business size:

• Standard businesses: Quarterly filing

• Large businesses or by request: Monthly filing

Key Deadlines

Filing and Payment Deadlines

Period Type | Example Period | Filing & Payment Deadline

Quarterly | Quarter ending 31 March | 7 May

Monthly | Month ending 31 January | 7 March

Remember: Both filing and payment are due 1 calendar month + 7 days after your VAT period ends.

Penalties and Interest Charges

Stay on top of your VAT obligations to avoid these penalties:

Late Filing Penalties - Points System

Late Filing Penalty Points

Filing Frequency | Points to Trigger Penalty | Penalty Amount

Quarterly filers | 4 penalty points | £200

Monthly filers | 5 penalty points | £200

Each subsequent late filing | N/A | Additional £200

Good news: Penalty points expire after 2 years if you don't reach the threshold.

Late Payment Penalties

Days Late | Penalty | Additional Charges

1-15 days | No penalty (grace period) | Interest only

16-30 days | 2% of outstanding VAT | Interest

31+ days | 4% total (2% + 2%) | Interest + daily penalty at 4% per annum

Interest rate: Bank of England base rate + 2.5% on all overdue amounts

Payment Methods

HMRC accepts several payment methods:

• Direct debit (recommended - automatic and reliable)

• Bank transfer - Faster Payments, CHAPS, or Bacs

• Online banking

• Credit/debit card (suitable for smaller amounts)

Quick tip: Set up direct debit to avoid missing payments and incurring penalties.

Additional Reporting Requirements

Post-Brexit Changes

• Intrastat reporting no longer required - replaced by customs declarations

• Different rules may apply for goods movements

Useful Resources

Stay informed with these official resources:

• HMRC main website: https://www.gov.uk/government/organisations/hm-revenue-customs

• VAT registration guidance: https://www.gov.uk/vat-registration

• Making Tax Digital information: https://www.gov.uk/government/collections/making-tax-digital-for-vat

• Current VAT rates: https://www.gov.uk/vat-rates

Key legislation: VAT Act 1994 and VAT Regulations 1995

Next Steps for Your Business

1. Check your registration requirement - calculate your UK taxable turnover

2. Gather required documents - use our checklist above

3. Choose MTD-compatible software - essential for compliance

4. Set up payment methods - we recommend direct debit

5. Mark filing deadlines - add reminders to avoid penalties

Need help with UK VAT registration or compliance?

Our tax experts are here to guide you through the process. Contact us anytime!