Distance selling into the UK from other EU countries and VAT

Distance selling into the UK from other EU countries and VAT

If you’re a VAT-registered business outside the UK but in another European Union (EU) country and you sell and deliver goods to customers in the UK or the Isle of Man who isn’t VAT-registered – and don’t have to be registered – then you’re ‘distance selling’. Sales you make to customers who are VAT-registered don’t count as distance sales.

European businesses that distance sells into the UK have to register for UK VAT if the value of their distance sales is more than £70,000 in a year. If you distance sell excise goods like alcohol and tobacco then you’ll have to register for UK VAT and Excise Duty no matter how much your sales are worth.

Distance selling only involves goods, not services. And it only takes place when someone registered for VAT in one EU country sells and delivers goods to someone in another EU country who isn’t registered – and doesn’t have to be registered – for VAT.

VAT registration threshold is different local VAT businesses; the VAT registration threshold is £70,000, this threshold is calculated by considering a calendar year, not a business’s financial year. If the value of your distance sales goes over the threshold then you have to register for UK VAT. You then charge VAT on your VAT taxable sales at the UK rate instead of using your own country’s rate and company accounts for it here. Even if you don’t have to register for UK VAT as a distance seller, you can apply to register voluntarily.

To work out how much your distance sales are worth, add up the total value of all the VAT taxable distance sales you make into the UK and the Isle of Man, including any zero-rated goods. However, don’t include the following:

goods you install or assemble at your customer’s premises
New Means of Transport (NMT), like certain vehicles and boats
any capital assets you sell, like vehicles and equipment
You have 30 days from the date your sales hit threshold limit to send a completed form VAT 1A ‘Application for Registration – Distance Selling’ to HMRC.

We can get your business registered for VAT-Distance Selling by filling out the VAT 1A ‘Application for Registration – Distance Selling’ form and help you in getting your business complied with the UK rules.

Being outside the UK could be difficult for you to manage with VAT affairs; we can act as your agents and represent you to deal with your VAT affairs at a cheap rate. To get the best quote please drop us an email or contact us by phone in contact us section.

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