About VAT registration on platforms such as online marketplaces (Amazon, Ebay)

We want to sell on Amazon with our company in the UK. Do we need to pay VAT if the company director is based outside the UK? Will the £85k limit be ignored?

Hi,

If the business is overseas and selling goods within the UK, then the VAT threshold of £85k will not apply and the company would need to register for VAT.

The business would need to be classed as a business not established in the UK.

You can find guidance for non established businesses here:

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

Thank you.

First of all, I would like to point out this. The company is a company established in England. Only the company director is resident outside the UK. That's why we want to sell on Amazon through a company in the UK. We would like to know whether we are entitled to benefit from the £85k threshold in such a case.

Hi Having a UK company registration alone is not sufficient therefore HMRC have provided the link to guidance above about what is considered UK established for VAT purposes. You have not provided enough information for HMRC to give you a definitive answer. Note: HMRC are aware the establishment rules are not understood therefore they are currently contacting uk registered businesses where there are only overseas directors and they are registered at the same address as multiple other businesses to request proof that there is an established premises. If you meet the establishment requirements then the threshold for VAT registration is £85,000 turnover. If you don’t then you are regarded as a NETP and there is a zero vat registration threshold. I have copied the relevant paragraph s below on what is considered establishment. 9.1 NETP — definition A non-established taxable person (NETP) is any person who is not normally resident in the UK, does not have a UK establishment and, in the case of a company, is not incorporated in the UK. 9.2 UK establishment: definition A UK establishment exists if either the: place where essential management decisions are made and the business’s central administration is carried out is in the UK business has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK We would normally consider a company which is incorporated in the UK to have an establishment in the UK as long as it’s able to receive business supplies at its registered office. 9.4 If you have an establishment in the UK If you have a UK establishment, you are not an NETP. You’ll be registered at the address of your principal UK place of business. Your VAT records and accounts should be kept at this address and should be available for HMRC to inspect. You should ensure that someone responsible for your VAT affairs can be available at the address. If that person is an employee, you should give them written authority to act on your behalf.

Hi,

You will only benefit from the 85k threshold if the company is established in the UK and is not a non established business.

The guidance states:

A UK establishment exists if either:

• the place where essential management decisions are made and the business’s central administration is carried out is in the UK
• the business has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK

We would normally consider a company which is incorporated in the UK to have an establishment in the UK as long as it’s able to receive business supplies at its registered office.

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

Thank you.