VAT registration for UK companies with non-resident directors

VAT registration requirements can be incredibly confusing, particularly for overseas businesses or UK companies with non-resident directors and shareholders. For this reason, we always recommend seeking professional tax advice from an accountant to ensure your company is compliant. 

Most businesses can register for VAT online. In this post, we explain when VAT registration is necessary, how to register, and what information you’ll be asked to provide as part of the process.

Do I need to register for VAT?

In the UK, businesses must register for VAT with HM Revenue & Customs (HMRC) when the total value of their taxable sales is more than £90,000 in a 12-month period, or if they expect their turnover to exceed that amount in the next 30 days. 

Taxable sales are any transactions made in the UK that are not exempt from VAT.

When turnover is below the £90,000 threshold, businesses have the option to register voluntarily. Depending on the circumstances, voluntary VAT registration can be really beneficial to smaller firms. 

You will also need to register for VAT if your company is a non-established taxable person (NETP) making taxable sales in the UK. An NETP is any ‘person’ (a natural person or business entity) that doesn’t have a UK establishment.

Your company has a UK establishment if either of the following is true:

• the place where you make essential management decisions and carry out the company’s central administration is in the UK
• the company has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK

HMRC normally considers a company incorporated in the UK as having a UK establishment if it can make or receive business supplies at its registered business address. A UK registered office address, serviced office, or virtual office alone is not enough to create a business establishment.

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Therefore, if you run your UK company from overseas and do not have a UK establishment, your company may be classed as an NETP. In this situation, you must register for VAT if you make any taxable sales in the UK, or expect to do so in the next 30 days.

Exceptions

There are certain exceptions for non-established taxable persons, so you may not need to register your company for VAT in the UK if:

• all of your sales to the UK are zero-rated (i.e. they have a VAT rate of 0%)
• you are an overseas seller and all of your sales to the UK are made through an online marketplace to non-business customers in the UK (England, Scotland, Wales, and Northern Ireland)
• you are a business based in an EU member state and you make sales of goods to ‘non-taxable’ customers in Northern Ireland
• all of your sales to the UK are made to VAT-registered businesses in Great Britain (England, Scotland, and Wales) that will account for the VAT using the ‘reverse charge’ procedure

If none of these apply, you must register within 30 days. You can do so in the normal way – using HMRC’s online VAT registration service. 

HMRC provides detailed guidance on who should register for VAT, including information on NETPs.

How to register for VAT as a UK company with non-resident directors 

The vast majority of businesses can register for VAT with HMRC online. To do so, you’ll need to sign in to your company’s online business tax account using your Government Gateway user ID and password. If you don’t have a user ID, you can create one when you start the VAT registration process. 

You’ll then be asked a series of questions about your business to establish the reason why you are applying to register.

Next, you’ll need to provide information about you and your company, including:

• company registration number – the 8-character number shown on your company’s certificate of incorporation
• the company’s Unique Taxpayer Reference – the 10-digit number issued by HMRC when you registered for Corporation Tax
• your full name and date of birth 
• National Insurance number – if you don’t have one, select ‘I do not have a National Insurance number’
• your home address, email address, and telephone number  
• primary (principal) place of business – this is where your company receives orders and where the day-to-day running of the business takes place
• business email address where you’d like to receive communications and updates from HMRC about your VAT 
• description of what your company does 
• Standard Industrial Classification of economic activities (SIC codes)
• whether you need an Economic Operators Registration and Identification number (EORI number)
• details of annual turnover  
• bank account details for the company 

HMRC will also ask you to verify your identity, so you’ll need to provide one form of government-issued photographic ID (e.g. passport, driving licence, or national identity card) and two additional pieces of evidence, such as a mortgage statement, lease or rental agreement, or birth certificate. 

Identity documents for non-resident directors may need to be certified. If they are not in English, you must also provide a translation. 

If you cannot register online

Under certain circumstances, you can complete your VAT registration by post using form VAT1. This may be necessary if, for example, you are applying for a registration ‘exception’, or if it’s not reasonable or practical for you to use the online service.

You can apply for a registration exception if your company’s taxable turnover exceeds the VAT registration threshold and you believe this will only be the case temporarily.

Our VAT Registration Service

At 1st Formations, our VAT Registration Service is available to all UK limited companies, including those with non-resident directors. You can use this service regardless of whether your turnover is above or below the VAT registration threshold.

Our London-based experts will prepare your VAT registration documents and submit them to HMRC on your behalf. As soon as your application is approved by HMRC, you will receive your VAT number and registration information by post.

After VAT registration 

HMRC normally issues VAT registration certificates by post within 30 days of registration. However, it can sometimes take longer, particularly for companies with non-resident directors. 

• VAT registration number – what you should know

Your certificate will contain your company’s 9-digit VAT number, which you must include on all invoices you raise. You cannot include VAT on your invoices until you receive your VAT number, but you can increase your prices in the meantime to account for the VAT that you will need to pay to HMRC.

Alongside your certificate, HMRC will also send you:

• information about how to set up your business tax account (if you don’t have one already) – you will need this to access the VAT online service
• information about when to submit your first VAT Return and payment to HMRC
• confirmation of your company’s ‘effective date of registration’ – this is your official VAT registration date

When you receive all of this information, you’ll need to log in to Government Gateway and sign up for a VAT online account by selecting the option ‘VAT submit returns’.

Once this is set up, you’ll use the online service to:

• find out your deadlines for submitting VAT Returns
• set up a Direct Debit to pay your VAT bills
• view your VAT payments and how much you owe
• check and appeal any penalties
• tell HMRC about changes to your business
• cancel your VAT registration

It is important to keep your company’s VAT registration details up to date. Certain changes will require you to cancel or transfer your VAT registration.

Updating your VAT registration details

You must update your VAT registration details with HMRC within 30 days if there are any changes to the following:

• name, trading name, or main address of your company
• accountant or tax agent who deals with your VAT

If you change your company’s bank details, you must tell HMRC at least 14 days in advance of doing so. You’ll also need to tell your bank if you pay your VAT bills by Direct Debit. However, do not do this in the 5 banking days before or after your VAT Return is due – otherwise, you could end up paying twice.

Cancelling your VAT registration

Thanks for reading 

If you’re unfamiliar with VAT registration requirements in the UK, or unsure whether to register your company for VAT, it’s best to seek professional advice and assistance from a qualified tax agent or accountant.

Please feel free to leave a comment below if you have any questions about his post, or contact us directly if you’d like to speak to someone about our VAT Registration Service.

Explore the 1st Formations Blog for more limited company guidance and small business advice.