VAT registration for UK companies with non-resident directors
VAT registration requirements can be particularly confusing for overseas businesses or UK companies with non-resident directors and shareholders. Therefore, we highly recommend seeking professional tax advice from an accountant to ensure compliance.
Most businesses can register for VAT online. In this post, we’ll explain when VAT registration is necessary, how to register, and the information you’ll need to provide during the process.
Do I need to register for VAT?
In the UK, businesses must register for VAT with HM Revenue & Customs (HMRC) if their total taxable sales exceed £90,000 in a 12-month period or if they anticipate exceeding this amount in the next 30 days.
Taxable sales include any UK transactions that are not VAT-exempt.
Even if turnover is below the £90,000 threshold, businesses can choose to register voluntarily. Voluntary VAT registration can offer significant benefits to smaller firms depending on their circumstances.
Additionally, you must register for VAT if your company is a non-established taxable person (NETP) making taxable sales in the UK. An NETP refers to any person (individual or business entity) without a UK establishment.
Your company has a UK establishment if either of the following conditions is met:
- The place where you make essential management decisions and conduct the company’s central administration is in the UK.
- The company has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK.
Therefore, if you operate your UK company from overseas without a UK establishment, your company may be classified as an NETP. In this case, you must register for VAT if you make any taxable sales in the UK or expect to do so within the next 30 days.
Exceptions
There are certain exceptions for non-established taxable persons, so you may not need to register your company for VAT in the UK if:
- Your sales to the UK are all zero-rated (0% VAT).
- You are an overseas seller, and all your UK sales are conducted through an online marketplace to non-business customers in the UK (England, Scotland, Wales, and Northern Ireland).
- You operate from an EU member state and sell goods to ‘non-taxable’ customers in Northern Ireland.
- Your sales to the UK are exclusively to VAT-registered businesses in Great Britain (England, Scotland, and Wales), who will handle VAT through the ‘reverse charge’ procedure.
If none of these exceptions apply, you must register within 30 days using HMRC’s online VAT registration service.
HMRC offers comprehensive guidance on VAT registration, including details for non-established taxable persons (NETPs).
How to register for VAT as a UK company with non-resident directors
The majority of businesses can register for VAT online through HMRC. To begin, you’ll need to log in to your company’s online business tax account using your Government Gateway user ID and password. If you don’t have a user ID, you can create one during the VAT registration process.
During registration, you’ll answer a series of questions about your business to determine the purpose of your application.
Next, you’ll need to provide details about yourself and your company, including:
Here are the details you’ll need to provide about yourself and your company during the VAT registration process:
- Company registration number: The 8-character number on your company’s certificate of incorporation.
- Company’s Unique Taxpayer Reference (UTR): The 10-digit number issued by HMRC when you registered for Corporation Tax.
- Your full name and date of birth.
- National Insurance number (optional): Select ‘I do not have a National Insurance number’ if applicable.
- Your home address, email address, and telephone number.
- Primary (principal) place of business: Where your company receives orders and conducts day-to-day operations.
- Business email address for HMRC communications and updates about VAT.
- Description of your company’s activities.
- Standard Industrial Classification (SIC) codes for economic activities.
- Whether you need an Economic Operators Registration and Identification (EORI) number.
- Details of annual turnover.
- Bank account details for the company.
HMRC will also require you to verify your identity by providing one form of government-issued photographic ID (e.g., passport, driving licence, or national identity card) and two additional pieces of evidence, such as a mortgage statement, lease or rental agreement, or birth certificate.
For non-resident directors, identity documents may need to be certified. If these documents are not in English, you must also provide a certified translation.
Before applying for VAT registration, we recommend reading VAT Notice 700, a comprehensive guide that outlines all VAT rules and procedures to help you understand your responsibilities. HMRC’s VAT registration notes, which include a glossary of VAT terms, are also a valuable resource.
If you cannot register online
In certain circumstances, you may choose to complete your VAT registration by post using Form VAT1. This may be necessary, for example, if you are applying for an exemption from registration or if it is impractical or unreasonable to use the online service.
You can apply for a registration exemption if your company’s taxable turnover temporarily exceeds the VAT registration threshold.
Startxpress VAT Registration Service
At Startxpress, our VAT Registration Service is accessible to all UK limited companies, including those with non-resident directors, regardless of whether their turnover exceeds the VAT registration threshold.
Our team of experts in London will handle the preparation of your VAT registration documents and submit them to HMRC on your behalf. Once HMRC approves your application, you will receive your VAT number and registration details by mail.
After VAT registration
HMRC typically issues VAT registration certificates by post within 30 days of registration. However, processing may take longer, especially for companies with non-resident directors.
Your certificate will feature your company’s 9-digit VAT number, mandatory for inclusion on all invoices. Until you receive your VAT number, you cannot add VAT to your invoices. However, you can adjust your prices to accommodate the anticipated VAT payable to HMRC.
Alongside your certificate, HMRC will also send you:
- Instructions on setting up your business tax account (if not already done) to access the VAT online service.
- Guidance on when to submit your first VAT Return and payment to HMRC.
- Confirmation of your company’s ‘effective date of registration’, marking your official VAT registration date.
Once you receive this information, you’ll need to log in to the Government Gateway and sign up for a VAT online account. Select the option ‘VAT submit returns’ to proceed.
Once set up, you’ll use the online service to:
- Check your deadlines for submitting VAT Returns
- Set up a Direct Debit for paying your VAT bills
- View your VAT payments and outstanding amounts
- Review and appeal any penalties
- Inform HMRC about changes to your business
- Cancel your VAT registration
It’s important to maintain accurate VAT registration details for your business. Certain changes may require you to cancel or transfer your VAT registration.
Updating your VAT registration details
You are required to update your VAT registration details with HMRC within 30 days if there are any changes to the following:
- Name, trading name, or main address of your company
- Accountant or tax agent handling your VAT
If you intend to change your company’s bank details, you must inform HMRC at least 14 days prior to the change. If you pay your VAT bills via Direct Debit, you also need to notify your bank. However, avoid making these changes during the 5 banking days before or after your VAT Return is due to prevent double payments.
Cancelling your VAT registration
You must cancel your VAT registration within 30 days if your company is no longer eligible. This can happen if you cease trading or making VAT-taxable sales, or if you join a VAT group.
If your company’s VAT-taxable turnover falls below £88,000 (the deregistration threshold), you can request HMRC to cancel your VAT registration, unless:
- Your business is based outside the UK, and
- You supply goods or services to the UK (or expect to do so within the next 30 days).
In most cases, you can cancel online. HMRC typically confirms the cancellation and your official date of cancellation within 3 weeks.
For more details, check out the Startxpress Help Center and Blog.
If you’re unsure about VAT registration requirements in the UK or need guidance, don’t hesitate to contact us at support@startxpress.io. Our team is here to assist you at every stage.
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