Country Guide: United Kingdom


Looking to expand your e-commerce business to the UK, then look no further, here is AVASK's guide to VAT in the UK:

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Country Profile:
The United Kingdom

UK E-commerce facts:

Population67.53 million
(January 2020)
Currency:Pound Sterling (£)
Number of e-commerce users:60.7 million
(January 2020)
Revenue in e-commerce market:£65.9 billion
Estimated market growth:4.6% to £78.94 billion by 2024

UK thresholds and additional summary:

Distance Selling Threshold (DST)£75,000
Intrastat Thresholds:

Dispatches:
£1.5 million

Arrivals:
£250,000

VAT number format:GB 123 4567 89
VAT return period:
Monthly or quarterly
VAT return deadline7th day of the month following period end
Annual VAT filing deadline:Not required
EC sales lists reportingMonthly or quarterly

VAT in The United Kingdom

The United Kingdom (UK) left the European Union (EU) on the 31st January 2020, however it will retain the EU's VAT rules as a part of the UK's transition agreement with the EU, until 31st December 2020.

The EU and draws up its tax rules according to the laws or directives issued from Brussels, which the UK currently subscribes to. The current VAT directive also applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.

The UK is obliged to implement the VAT directives, which provides guidance on VAT under its withdrawal agreement with the EU. Where there is a conflict, the European Union’s directive takes precedence. The UK is not a member of the Eurozone and uses its own currency, the British Pound (£ or GBP).


VAT registration in the United Kingdom

Both EU and non-EU businesses may trade in the UK without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in the UK for the registration of non-resident traders, but you will need one to record transactions and your British customers will want proof that you have obtained one.

There are strict rules on the situations where VAT registration is permitted. Common scenarios that require UK VAT registration include:

  • Importing goods into the UK;
  • Organising live events, conferences, etc. in the UK;
  • Holding goods in a warehouse in the UK as stock for resale;
  • Buying goods within the UK that are subsequently re-sold in-country;
  • Selling goods from the UK to other EU member states;
  • Distance-selling to private individuals in the UK, e.g. internet retailing or trading through an e-commerce platform.

Registering for UK VAT generally takes up-to a week once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.

UK VAT compliance

There are detailed rules controlling the recording and processing of UK transactions for VAT purposes. This includes guidelines on:

  • UK invoice requirements;
  • When to issue a UK tax invoice;
  • Foreign currency reporting;
  • Credit notes and corrections;
  • Correcting entries from prior returns;
  • Which accounting records must be maintained.

United Kingdom VAT rates

VAT Rate% Rate
Standard Rate20%
Reduced Rate5%
Zero Rate0%

Need help expanding to The United Kingdom?

Contact AVASK's International Business Development Team Today!

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Tom Meek

International Business Development Manager

Location: Southampton, UK
Tel: +44 (0)23 8060 0120


Book an Appointment
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Christine Lawless

International Business Development Officer

Location: Southampton, UK
Tel: +44 (0)23 8060 0120


Book an Appointment
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Jacob McQuoid

International Business Development Officer

Location: Southampton, UK
Tel: +44 (0)23 8060 0120


Book an Appointment