Established or Non-Established

Hi, I have read the guidelines of NETP and UK established business. I have only 1 question. My client is non-uk resident. He has his UK LTD company registered at a physical place in UK and the client pays fees for this place. This place is also able to receive business supplies but in practicality, the client has not used this place so far for this purpose. Can we consider his company as ESTABLISHED based on the following definition HMRC of ESTABLISHED COMPANIES; "https://www.gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg37150 We would normally consider a company which is incorporated in the UK to have an establishment here as long as it is able to receive business supplies at its registered office." Thanks

Hi Amazo,
You have referred to the correct guidance to define a UK established business but it would be the decision of the client to determine whether or not they are UK established or a NETP.
Thank you.

Hi, We have a similar situation. We are UK registered LLC and maintain the ability to receive business supplies at our registered address continually since 2010. This is it is not sufficient for Amazon VAT establishment verification. Amazon AI determined we are established outside UK. They demand £173,741.33 VAT payment to Amazon which is out of our reach. They block all our funds including tax money. They simply ignore all our appeals. Any advice on how to deal with this will be greatly appreciated.

This is a matter that you need to resolve with Amazon. The HMRC guidance is a little unhelpful, it suggests that all you need is a UK address where you can "receive business supplies", but that is a dumbed down explanation of what HMRC really means....Where is the day-to-day business carried out? HMRC want an address that they can visit to perform an inspection of records, are the business records held at this UK address? Is there someone at the premises whom HMRC can meet and speak with? Is the address where "business" is performed? HMRC have a standard letter which they are sending to suspected non-established traders who are using UK addresses and in that letter, HMRC define "UK establishment" as the address where i) makes essential management decisions and carries out its main administration in the UK and ii) it has a permanent physical presence in the UK, with human and technical resources to make or receive taxable supplies. https://www.icaew.com/-/media/corporate/files/insights/tax-news/hmrc-one-to-many-letter-netp.ashx?la=en Suspect Amazon are looking at Companies House and see that all control/Directors are overseas, that makes the LLC non-established in the eyes of Amazon. Amazon will not know whether the UK business address you are using is genuinely where the day-to-day business is carried out. You say you have the ability to receive business supplies at your registered UK address....what do you mean by that? Can HMRC arrive at the premises and inspect your records? Have you got employees at the premises dealing with calls and visitors? In HMRC's letters to suspected non-UK established traders, the evidence HMRC asks for includes :-  rental, lease or tenancy agreements, with proof of payment  records of the staff the business employs – for example, Names, National Insurance numbers, addresses of employees and PAYE reference  council tax bills  utility bills  National Insurance numbers for the directors If this is what HMRC are seeking as evidence of UK establishment, then presumably Amazon would also be satisfied with similar evidence, liaise with Amazon to see what evidence they will be satisfied with.

Hi,

If a business believes that they have overpaid VAT on their VAT returns then they must submit an error correction to HMRC. You should submit this correction as quickly as possible after discovering the error. HMRC will be unable to process any refund of overpaid VAT without the VAT returns being corrected.

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

If you are worried about being able to meet VAT payments owed to HMRC, or you anticipate that payments coming due will cause  problems, we would encourage you to set up a self service time to pay arrangement while the situation is resolved. You can do this online. If you cannot set up a time to pay arrangement online, you can also contact HMRC’s debt management team.

If you believe your business is established in the UK but have concerns that this is not correctly shown on HMRC systems or if the marketplace has requested you update your VAT details with HMRC to show you are UK established, then please contact: isbcvatestablishment@hmrc.gov.uk 

Thank you.

Hello, I have a similar question I'm trying to find an answer to as well. I work for an American Brewery that has recently begun contract brewing in the UK. We have started the process to get VAT and become established in the UK. We have a physical address in the UK but so far, no employees that are under our payroll. In order to become established in the UK, does my business need to employ a UK resident?

if the director is non uk resident and has uk limited company and he has employed someone in UK (does the salary has some minimum salary requirement or not) and business is also using shared working space where his employee works part time. Please confirm, if shared working space and employment of a person is enough to prove uk establishment and also is there any minimum salary requirement?

Hi ,

Adil Vohra ,   Thank you for your query. You can find HMRC guidance on the definition of a permanent establishment at INTM264300. Thank you .

Hi
 

Sara Fornes ,   Unfortunately we would not be able to answer questions regarding how a business can become established, this question as it is outside the remit of this forum. Thank you .