An Australian citizen has set up a sole trader business in Australia to sell clothes to both world markets. The products are produced in China and imported to fulfilment centres in Australia and the UK. The Australian has a partner (personal) in the UK (UK Citizen) who is not currently a part of the business but is considering becoming so.
On import to the UK, duty and VAT are payable at 12% and 20%. It is expected the yearly turnover, initially, will be less than the £85,000 VAT threshold.
- It is my understanding that a non EU small business must be registered for and charge VAT in the UK regardless of turnover amount. Is this correct?
- If the Australian and UK citizen form a partnership in the UK does it have to be registered for and charge UK VAT. (Does the division of profits within this partnership have an impact?)
- if they set up a separate legal entity (limited company) would the requirement for VAT registration differ?