We are primarily based in the U.S. with a Limited company setup using a small satellite office in the UK for the registered address. We are about to VAT register but after some due diligence we are hesitant to do so as a UK entity. An acquaintance suggested to me that because we are in the U.S. we will not be considered UK established even with our UK location listed as the registered office. We called the HMRC VAT hotline and they suggested the same thing saying that HMRC might investigate and switch us to NETP status and slap a 35% penalty on the VAT owed before the threshold.
However, we know of over 100 other similar foriegn businesses (online traders) that have the UK LTD company setup similar to ours. We have reached out to other accounting firms and they all said they have never heard of HMRC investigating a UK Limited company and switching them to a NETP in this situation.
My question is would it be risky to proceed with VAT registration as a Limited company or should we proactively convert to a NETP to avoid the 35% penalty?
Thanks for your help in advance!