VAT Compliance - United Kingdom

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VAT rates

The following VAT rates are currently used in United Kingdom:

20%

Standard rate

0%, 5%

Reduced rates

As of January 1, 2021. The UK does not apply EU VAT rules.

Update: 2025-03-05

Services

The services we provide in this country

VAT registration

Filing VAT declarations on a monthly/quarterly basis

Business consulting

VAT rates verification

VAT service

Who is required to register as a VAT payer?

Registering for VAT is obligatory for businesses that:

Import goods for the UK market,

Purchase and sell goods in the United Kingdom

Store goods in the UK for resale

Organise live events, exhibitions, conferences, etc. in the UK.

VAT declarations

Tax return deadlines and penalties

If a non-UK resident foreign entity uses a fiscal agent, it can register online. Non-UK companies from countries with which the UK does not have a tax information exchange agreement may require the appointment of a fiscal agent, who is jointly and severally liable for any tax liability, interest or fines.

Declarations can be submitted on a monthly or quarterly basis. In most cases, however, quarterly settlements are used.

After registration, a business will be assigned to one of three VAT accounting groups:

Stagger group 1 – settlements for quarters ending March, June, September and December,
Stagger group 2 – settlements for quarters ending April, July, October and January,
Stagger group 3 – settlements for quarters ending May, August, November and February.

Monthly or quarterly returns must be submitted electronically, via the HMRC website, by the 7th day of the second month following the end of the relevant accounting period.

Penalties resulting from late VAT returns are assessed according to a fixed point system. For each late submission of a VAT return, a taxpayer receives 1 penalty point. Once certain thresholds are exceeded, HMRC will impose a £200 penalty. Any further late declaration will incur an equally high penalty (i.e. £200).

Other entities

Rules for foreign entities

When accounting for VAT, you cannot deduct input tax on the purchase of cars (except when they are used exclusively for business purposes), goods and services not used for business purposes, and representation expenses (excluding expenses related to foreign clients).

Foreign entities doing business in the UK, must also comply with local regulations in terms of, among other things: invoicing and archiving receipts and records for seven years.

Area of operation

We provide VAT compliance services on a global scale

Talk to us for details or check out our other offers.

Ian Knapton

Sales Director

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Do you sell your products online?

Are you planning a foreign market expansion of your business?
Are you starting selling on Amazon or eBay?
Did your company exceed sales thresholds in cross-border selling and you are obliged to register for VAT in the recipient countries?

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