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News & Tips

VAT returns - Periodicity [Tip]

VAT returns should in principle be filed on a quarterly basis. Monthly reporting period can be opted for in case your company is regularly in a VAT receiving position.You can apply to the National Registration Services [NRS] to change your VAT return periods to coincide with your calendar quarterly ESL period.


Annual Accounting scheme [Tip]

If you use the Annual Accounting Scheme, you only need to submit one online VAT Return per year. You pay your VAT during the year by making nine monthly or three quarterly interim payments towards your total annual VAT bill. Your interim payments are due at the end of months 1) 4 to 12 of your annual accounting year if you are making monthly payments and 2) 4, 7 and 10 of your annual accounting year, if you are making quarterly payments. Your online return, along with your balancing payment is due two months after the end of your annual accounting period.


Intrastat threshold for arrivals [News 01/01/2015]

As from 01/01/2015, intrastat threshold for arrivals will be increased from GBP 1,200,000 to GBP 1,500,000. Intrastat threshold for deliveries [GBP 250,000] remains unchanged.

More VAT News & Tips in The United Kingdom

DOING BUSINESS IN THE UNITED KINGDOM [GB] - VAT GUIDE

 

General

VAT Directive

The United Kingdom

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

UK VAT numbers have 11 characters [GB + 9 digits].

 

What is the local name of the tax?

 

Value Added Tax [VAT]

 

VAT rate

VAT Directive

The United Kingdom

 VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

The United Kingdom applies a standard VAT rate of 20% and one reduced rate of 5%.

Some goods and services are also taxed at a zero rate.

See VAT rates applied in the EU.  

VAT return

VAT Directive

The United Kingdom

How is the tax period determined? 

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year. 

Monthly/Tri-Monthly/Yearly

Your company has to report its VAT position by filing periodical VAT returns on tri-monthly basis [three months which do not necessarily correspond to a calendar quarter].

Monthly reporting period can be opted for in case your company is regularly in a VAT receiving position.

Opting for a yearly reporting period is also possible under conditions [VAT annual accounting scheme].

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

Your company has to file periodical VAT returns by electronic means before the 7th day of the second month [7 of N+2] following the tax period [e.g. tax period ending in March 31st => deadline: May 7th].

Statement

VAT Directive

The United Kingdom

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require the taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

No

Your company is not required to file any summarizing annual VAT return in the United Kingdom.

Recapitulative statement of intra-EU supply of goods

[European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

Your company is required to submit ESL by electronic means for each calendar quarter [but may choose to submit monthly if you prefer] provided your intra-EU supplies of goods have not exceeded GBP 35.000 within the current or four previous quarters.

If your company exceeds the above threshold, you must submit the ESL on a monthly basis.

The deadline for submitting ESL to HMRC, for all frequencies of submissions are within 21 days of the end of the reporting period.

Payment

VAT Directive

The United Kingdom

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. 

Member States may, however, set a different date for payment of that amount.

 

 

The deadline when your electronic payment should clear into HMRC's bank account is usually the same as the deadline for your return. You should check with your bank how long it will take for your payment to clear into HMRC's bank account as some methods of payment do not operate over the weekend or on  bank holidays.

Are interim payments required?

Member States may require interim payment to be made.

Interim payments are not required [unless in case of annual VAT return or for every VAT registered company filing quarterly VAT returns but with annual VAT liability of more than GBP 2.3 million, it is required to make payments on account].

 

VAT refund

VAT Directive

The United Kingdom

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

No carry-forward mechanism. Refund is done immediately by submitting the periodic VAT return.

Special measures for foreign companies

VAT Directive

The United Kingdom

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

No

Reverse charge is not applicable on major supplies of goods [with exception for specific items].

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider.  

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Domestic reverse charge has been partially implemented in the UK for services. The services to which this applies are:

• services relating to land and property (except opted supplies of land)
• restaurant and catering services, admission to an event and work on goods
• passenger transport
• services that are treated as supplied in the UK as a result of the use and enjoyment provisions

The local reverse charge only applies provided your client is established and VAT registered in the UK.

Have simplification measures been taken to avoid registration of the foreign company for the goods held on consignment in the country?

 

No

No simplification measures are available for consignment stock. Foreign taxpayers are therefore required to be registered for VAT purposes in the United Kingdom to report a deemed intra-EU acquisition of goods and charge British VAT on the subsequent supply of goods to final client.

 

Do special arrangements apply to "call-off-stock"?

 

Yes

Simplification measures apply for call-off-stock. Foreign taxpayers are therefore not required to be VAT registered in the United Kingdom provided the conditions are met.

 

Triangulation can be applied when the middleman (B) is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?  

Triangulation simplification measures cannot be applied even if the middleman B is VAT registered as a non-established company in the United Kingdom [Member State C].

 

VAT on import

VAT Directive

The United Kingdom

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

The United Kingdom has introduced VAT warehousing regime applicable under specific conditions.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return  to be submitted.

 

Postponed accounting via the VAT return is not possible in the United Kingdom.

A deferred payment for VAT and customs [similar delay] is however possible under specific conditions.

 

Miscellaneous

VAT Directive

The United Kingdom

Intrastat Threshold  

Dispatches: £ 250,000

Arrivals: £ 1,500,000 

Distance Sales - Threshold  

£ 70,000

See various thresholds applied in the EU

Ministry of Finance   website

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