Should your company be VAT registered in the UK?
This can be done either by setting up a UK entity, and that entity becomes VAT registered; or your overseas company becomes VAT registered in it’s own name.
Until your UK business reaches the compulsory VAT registration threshold, currently £85,000 (see below) then there is the option to become voluntarily VAT registered in the UK.
You must register for VAT in the UK if:
- your VAT taxable turnover is more than £85,000 (the ‘threshold’) in a 12 month period
- you receive goods in the UK from the EU worth more than £85,000
- you expect to go over the threshold in a single 30 day period
UK entities approaching the threshold must make an application to become VAT registered with HMRC. Successful registrations mean there is a requirement to complete and file VAT returns.
As a business, there are certain advantages and disadvantages you may wish to consider when deciding whether or when to become VAT registered.
As part of our pre-advice discussion, we explore whether your entity should become VAT registered, or wait until the turnover reaches the registration threshold.