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Obtaining VAT Registration for UK Company

Goods are being despatched from overseas

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A business is selling goods overseas now wants to incorporate the UK and sell goods from the UK Company to UK Customers.  They will not have any physical presence in the UK so no business or fixed establishment under 

The reason for a UK company is just really to show to UK Customers they are selling from UK.  The UK company would pay the import VAT.  The goods would probably be shipped straight to the UK Customer from overseas.

They prefer to sell from the UK company but have to showing they are making taxable supplies in the UK. The UK company will enter into a contract with the UK customers and issue invoices which I know HMRC will want to see evidence of before issuing the VAT Registraton.

I understand the UK company can be a Non Established Taxable Person even though the UK company is being managed from overseas hence there is no VAT threshold. 

What I am trying to distinguish who is making the taxable supplies i.e UK or overseas company - perhaps case of form over substance ? Can HMRC say that the overseas company is actually making taxable supplies and disallow any claim for any input/import VAT.

 

Replies (7)

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By Duggimon
06th Oct 2020 10:44

So you want to show UK customers the company is selling from the UK, but show HMRC that it is not selling from the UK?

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By sanjay100
06th Oct 2020 11:00

My client wants to show the UK company as a front for UK customers and HMRC. Its a tricky one as there is no fixed or business establishment

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By Cheshire
06th Oct 2020 13:53

sanjay100 wrote:

My client wants to show the UK company as a front for UK customers and HMRC. Its a tricky one as there is no fixed or business establishment

'as a front'

So you want to assist in a deception?

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By paul.benny
06th Oct 2020 13:30

sanjay100 wrote:
he reason for a UK company is just really to show to UK Customers they are selling from UK. ...VAT.  The goods would probably be shipped straight to the UK Customer from overseas.

So this is essentially to lie to customers about who they are dealing with.

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By Jason Croke
06th Oct 2020 13:41

Firstly, a must read for businesses who drop ship or ship direct to customers from outside the UK, post Brexit will bring big changes.
https://www.gov.uk/government/publications/changes-to-vat-treatment-of-o...

Place of supply of goods determine the VAT treatment, if the goods are outside the UK at time of sale (whether by UK or overseas business), then you are not making any taxable sales in the UK and HMRC will likely refuse VAT registration.

You need to determine who has ownership of the goods when the goods land into the UK - it'll be i) the overseas supplier, ii) the UK Ltd or iii) the UK consumer.

Once you know who owns the goods at time of arrival into the UK, then you will know who is liable to pay import duty and import VAT and therefore who will be making the sale to the end consumer and that will then answer the question as to who registers for VAT.

This is a simplified response, there are many other factors in and scenarios in play, the above may not be the only solution to the situation.

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By Paul Crowley
06th Oct 2020 13:43

If I were a UK customer looking for redress I would consider this deliberate concealment of the true position. Probably look up who is assisting this arrangement and if I could find a qualified accountant complain to the regulating body and his insurance provider.

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By Matrix
06th Oct 2020 16:39

Have you considered the direct tax implications too? Where is this company managed and controlled?

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