VAT application for non UK director 100% owner :principal place of establishment of business

Hello, my name is Khalid, and I live in Morocco. I am the director and 100% owner of a UK LTD company. We have been selling on Amazon UK since 2020, with corporate tax paid in the UK for both 2021 and 2022. Our turnover for the last 12 months is less than £85,000, and we do not collect or pay VAT. In terms of our European sales, we hold stock in the UK, and Amazon handles VAT collection and payment for European sales. Specifically, we have generated €4,000 in Italy, €17,000 in France, €4,000 in Spain, and €4,000 in Germany. I applied for VAT registration on 01/07/2023 because our total UK and Europe sales amounted to approximately £85,000. However, our VAT application was rejected due to the reason cited as 'place of establishment of business.' I am seeking advice on how to obtain VAT registration, as I plan to exceed £85,000 in total sales for 2024. I have a 'tenancy agreement' for an empty office in London where I have secretary services, but I work 100% from Morocco. 1) Do I need to state that the 'principal place of establishment of business' is the UK address on the lease agreement, even if I manage the company remotely from Morocco? 2) As my company is managed from Morocco, is the threshold not applicable to me? 3) Does my company need to pay VAT since 2021?"

Hi,

It is important to establish whether your company is established in the UK or established overseas.

If you are established in the UK then the £85K does apply and you do not need to register for UK VAT until you breach this threshold.

However if you are a'non established taxable person' then the threshold does not apply and you would need to reguster for VAT upon the first sale being made in the UK.

Who should register for VAT (VAT Notice 700/1)

Whether you would have needed to register for VAT in 2021 will depend on whether you are a non established business or not.

Thank you.

Hi Admin i live abroad as non UK citizen, but i have an accountant and lease agreement for the business office address, we can receive goods in the office and forward them to Amazon warehouse, we are 100% selling using amazon service (shipping and payments collection) we don't ship from our company to clients. please advice on this specific situation

Please advise on the actions to be taken if we have a VAT number as a non-established business. What are the VAT implications since 2021, considering Amazon did not collect any VAT as marketplace responsible for VAT for non-established UK businesses?

Hi,

We would not confirm whether or not you are a UK business or a non UK business as each situation is different.

You can find the definitions in VAT Notice 700/1.

Who should register for VAT (VAT Notice 700/1)

Thank you.

Hi,

If you have a VAT number as a non established business and you are either selling goods below a value of £135 directly to consumers or you are selling goods of any value from a warehouse in the UK, then the marketplace are responsible for paying the VAT.

We would recommend speaking to Amazon to resolve this as it could mean that the marketplace would need to retospectively pay this VAT to HMRC and they would want you to pass them the monies to do this.

If this is the case then you would need to complete an error report to HMRC to request a refund of these monies, so you can pass this to the marketplace in order for them to pay HMRC.

How to correct VAT errors and make adjustments or claims (VAT Notice 700/45)

Thank you.

base on " the marketplace would need to retospectively pay this VAT to HMRC and they would want you to pass them the monies to do this" can i claim 7.5% flat rate for my VAT application as non established business because 70% of my expenses are from china suppliers?