VAT registration - Supplying USA business only

VAT registration - Supplying USA business only

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If a UK based Ltd compnay supplies good (software) to a USA business, does the UK business need to register for VAT once they have reached the VAT threshold. I understand this to be outside the scope of VAT and therefore they will not need to register for VAT. Do this sound right?

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By Matrix
18th May 2020 16:55

Yes that is correct but a voluntary registration may be worth considering.

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Replying to Matrix:
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By Cerasoli1
18th May 2020 22:12

I am no VAT expert so correct me where I am wrong. The situation described seems to be an export sale that is VAT-taxable, albeit at zero percent. According to HMRC, zero-rated supplies should be considered when working out whether the VAT threshold has been exceeded. I.e., if the zero-rated sales to the USA business has exceeded the VAT threshold in any 12 month period, the UK company is obliged to register.

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Replying to Cerasoli1:
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By Degan89
19th May 2020 14:25

Yeh i have seen a mixture of opinions on this. HMRC VAT webchat has been busy (understandably) and seem none the wiser as well once i get through to them. More digging around i guess.

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Replying to Matrix:
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By Degan89
19th May 2020 14:28

This is my opinion as well from what I've read although many people have different interpretations of this. Did think about voluntary registration but this would have too much admin to make it worth it. Thanks

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By Cheshire
19th May 2020 14:44

Are these 'many people' VAT experts? Probably not. Some might be.

Never ever ever take Vat advice from HMRC. EVER.

What you are actually supplying is not very clear, to my befuddled brain at any rate, so might be another reason for a non straight answer, from 'many people'.

Have you considered Matrix's experience or knowledge here or just going to flounder about until you 'think' you have the right answer? But then how will you know if you have the correct answer? Are you prepared o make such a fundamental and potentially extremely costly mistake with your business?

Why would you not pay for some advice from a VAT expert? Or your Accountant?

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Replying to Cheshire:
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By Degan89
19th May 2020 16:38

Thanks for the advice.

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