VAT

Hi My friend is importing items from non EU country to UK and selling these items outside the UK. His annual turnover is more than £90,000. Do he need to register for VAT?

If goods are physically in the UK at the time your friend sells the goods, when the goods leave the UK to be delivered to overseas customers, these sales would likely be zero rated (zero rated export). Zero rated sales counts towards VAT registration threshold and in simple terms (as there is little detail in your post) this would mean your friend would need to register for UK VAT. They can, at time of registering, request to be exempted from registration on the basis they only make zero rated sales (only export goods abroad) and do not want to reclaim any import VAT and HMRC may accept that request. The registration can be done online and during the process it asks if you are seeking exception from registration on the basis of only making zero rated sales.

Hi Nazia Rafiq,
Where a business’s taxable supplies reach the VAT registration threshold, they must notify HMRC.
Exports of goods may be zero-rated supplies with VAT at 0% applicable where the conditions in notice 703 have been met.
VAT on goods exported from the UK (VAT Notice 703)
Zero-rated supplies are taxable supplies and count towards the UK VAT threshold.
Please refer to the registration guidance here:
Register for VAT
Thank you. 

 

Thank you for your reply. I have one more question kindly reply me. Do a UK company need to register for VAT if it buying and selling product outside the UK? The product is never be physically in UK at the time of sale.

Hi,

If goods are sold outside the UK then these supplies are outside the scope of VAT and would not consitute turnover for VAT purposes. Therefore, there would be no requirement to register for UK VAT.

Thank you.