What are legal requirements for overseas sellers in the UK selling their goods in UK market places?
If you are operating through the online market (website, Amazon, eBay etc.) and do not have a business establishment in the UK, you should be classed as an overseas seller and need a VAT agent to represent your VAT matters in the UK.
How to determine the principal place of business? To work out where the principal business location of the company is, we should establish
- Where the major business decisions are made
- Where your company is registered
- Where the management have their meetings
If all the above takes place outside the UK, you are an overseas trader and should consider registering for VAT as soon as you make decision to make supplies to the UK market.
The UK government is currently taking all steps to clamp down on those sellers who do not have a VAT registration and offer their clients lower prices.
An overseas seller must have a VAT registration in the UK if they start their business activities in the country irrespectively of the projected volume of sales. Therefore, we are witnessing growing demand in applications to assist overseas business to register for VAT.
Once you are registered for VAT, it becomes your obligation for account for your sales and purchases in the UK. You must charge VAT on all sales and will be able to claim VAT on all purchases and services.
The Chancellor Gorge Osborn gave tax inspectors big powers to identify and prosecute high risk overseas traders, who fail to comply with the requirements:
- To registered for VAT as soon as they start trading through UK online markets
- To file accurate VAT returns for their sales in the UK
- To the output VAT over to HMRC
If you fail to comply with these requirements, HMRC will approach the online platform you are trading through to remove you from their marketplace.
In the most recent Guidance HMRC recommend to appoint a VAT tax representative who will have enough knowledge and expertise to guide you through the perilous process of VAT registration and assist in preparing and filing your VAT returns every 3 months.
It is a common and usual practice for VAT Office to conduct inspections of your first VAT return, if your output VAT exceeds your input VAT, thus claiming VAT refund on your purchases or services. The inspection letter will come to your VAT registration address in the UK. It is important to respond and provide all the relevant evidence as soon as possible to avoid further complications. A tax inspector may visit your tax representative and conduct further checks on your business activities.
The recent HMRC notice VAT: overseas business using online marketplace to sell goods in the UK has made the marketplace operators liable for the VAT their sellers owe to HMRC. They may be served a liability notice until the seller meets all the necessary VAT requirements or the seller is removed from the marketplace.
UK-Accountant can act as your VAT representative in the UK market. As your representative and will bear joint liability for your VAT affairs and make sure that you comply with all the legalities of VAT registration, VAT reporting and payments to HMRC.
We will make your VAT registration as fast and easy as possible. After you get your registration, you will receive a full guidance of how prepare and filing your returns. Your dedicated VAT officer will answer your questions within 3 hours.