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Value Added Tax

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HM Revenue and Customs (HMRC) provide comprehensive information on Value Added Tax.

In the UK, a supplier of taxable goods or services must register for VAT with HMRC if his annual VAT taxable turnover is more than £81,000.* Voluntary registration below this figure is possible unless all supplies are VAT exempt.

* But see Supply of digital services below

Because of the potential for incurring penalties and fines, and being liable to pay HMRC substantial tax, it will generally be advisable to obtain specialist advice on VAT registration and accounting in all but the simplest cases.

Simplified VAT regimes are available for some smaller businesses and retailers, such as  the VAT Annual Accounting Scheme, Cash Accounting Scheme, Flat Rate Scheme, margin schemes and retail schemes.

Special rules apply for VAT on imports and exports of goods and services with EU countries and with countries in the rest of the world.

Supply of digital services from the UK to another EU member state

Before 2015, businesses with annual sales below £81,000 did not have to register for the VAT system in the UK. However, this exemption no longer applies to any firm selling digital services to customers in another EU country.

With effect from 1 January 2015, a UK supplier of digital services will have to register for VAT regardless of turnover if the business meets all of the following criteria:

* •supplies digital services from the UK to another EU member state (goods and non-digital services sold over the internet are not within scope);

* supplies (other than free of charge) those services to a private consumer in another EU member state


The rules also require VAT on such sales to be charged at the rate payable in the customer’s country, not the seller’s. This will potentially require firms to cope with 27 separate VAT systems.

Further information is available from HMRC.

06/03/2018 Fulfilment Businesses (Approval Scheme) Regulations 2018

Source: GOV.UK

The Fulfilment Businesses (Approval Scheme) Regulations 2018 [SI 2018/299] made to set out the detailed framework of the fulfilment house due diligence scheme for fulfilment houses operating in the UK that handle imported goods on behalf of third parties located outside the EU. The Regulations will come into force on 1 April 2018 and 1 April 2019.

The Regulations were made following a consultation in 2017. The Government stated that having explored stakeholders’ views on a wider definition which would have included businesses fulfilling their own orders of imported goods, it accepted that the wider definition would have brought into scope too many businesses that are not central to the abuse.

The timetable for registration under the scheme are as follows:

1 April 2018 - 30 June 2018: registration window opens for existing fulfilment businesses;

1 July 2018 -31 March 2019: verification window for HMRC;

Note : new businesses must register 45 calendar days in advance of the date they

commence trading as a registrable fulfilment business.

1 April 2019 -the date from which fulfilment houses need to feature on the

Register to trade as a fulfilment house


[Page updatted: 24/03/2018]


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