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Eligibility & Thresholds: When Must a Non-Resident Register for UK VAT?

For non-UK residents and overseas businesses, UK VAT registration is often triggered earlier than expected. This guide explains VAT thresholds for non-residents, when registration is required from the first sale, how NETP status affects eligibility, and how B2B reverse charge and distance selling rules apply — helping foreign companies understand exactly when UK VAT registration becomes mandatory.

When Must a Non-Resident or Foreign Company Register for UK VAT?

Who This Guide Is For

Typical Non-Resident Business Scenarios

This guide is written for overseas businesses and non-UK residents that are trading with the UK or considering entering the UK market, including:

  • Overseas companies selling goods to UK customers
  • Businesses holding or planning to hold stock in the UK
  • E-commerce sellers using fulfilment centres or marketplaces
  • Digital and service-based businesses supplying UK customers
  • UK companies with foreign directors and limited UK presence

If you are reviewing UK VAT registration for non-residents, this article focuses specifically on eligibility and thresholds, rather than the application process itself.

Learn about UK VAT registration for non-residents and when a foreign company must register for UK VAT from the first sale on our VAT services page.

The Core Question: “Do We Need a UK VAT Number – and When?”

The most common question from overseas businesses is not how to register, but whether registration is required at all — and from what point.

This guide answers:

  • Do non-UK residents need to register for UK VAT?
  • Does the VAT threshold for non-residents UK apply?
  • When must a foreign company register for UK VAT from first sale?
  • When does the B2B reverse charge remove the need to register?

Key Concept: Non-Established Taxable Person (NETP)

NETP Definition According to HMRC (Plain English)

Under HMRC rules, a Non-Established Taxable Person (NETP) is a business that:

  • Makes (or intends to make) taxable supplies in the UK
  • Does not have a business establishment or fixed establishment in the UK

This NETP definition (HMRC) is critical because it directly affects VAT thresholds and registration timing.

UK-Established vs Non-Established: What’s the Difference in Practice?

A UK-established business normally has:

  • UK staff or management
  • Premises with operational decision-making
  • Ongoing UK business substance

A non-established (NETP) business typically:

  • Operates from abroad
  • Uses third-party warehouses, fulfilment providers, or marketplaces
  • Has no UK employees or management presence

For VAT purposes, director residency alone does not determine establishment.

Why NETP Status Matters for VAT Thresholds and First-Sale Registration

NETP status is crucial because:

  • Many NETPs cannot rely on the standard VAT registration threshold
  • Registration may be required from the first taxable UK supply
  • HMRC applies stricter eligibility and compliance checks

This is why vat threshold for non-residents uk must always be assessed together with NETP status.

The Standard UK VAT Registration Threshold

What the VAT Registration Threshold Is (Turnover-Based Rule)

The standard VAT registration threshold UK is £90,000 of taxable turnover, calculated on a rolling basis.

This threshold applies to many UK-established businesses — and some overseas businesses — but not all.

Rolling 12-Month Historic Test – How to Calculate It

Under the historic test, you must register if:

  • Your taxable turnover exceeded £90,000
  • In any rolling 12-month period

This test requires continuous monitoring, not calendar-year tracking.

30-Day Future Turnover Test – Planning Ahead

You must also register if:

  • You expect taxable turnover to exceed £90,000
  • Within the next 30 days alone

This future test is particularly relevant for fast-growing overseas businesses entering the UK market.

Examples: Small vs Fast-Growing Overseas Businesses

  • A small overseas consultancy selling B2B services under reverse charge may remain outside UK VAT
  • A fast-scaling e-commerce seller holding UK stock may trigger registration immediately

When Non-Residents Must Register from the First Sale

Selling Goods Located in the UK (Warehouses, Consignment Stock, FBA)

If goods are located in the UK at the time of sale, registration is often mandatory from the first sale, regardless of turnover.

Common examples:

  • UK warehouses
  • Amazon FBA stock
  • Third-party fulfilment centres

(See UK VAT rules for Amazon FBA and online marketplaces.)

Fixed Establishment, Staff or Other “Permanent Presence” in the UK

If your business has:

  • UK staff
  • Operational decision-making in the UK
  • A fixed establishment

You may lose NETP status and fall under immediate VAT registration rules.

B2C Services Where the Place of Supply Is the UK

Certain services supplied to UK consumers are treated as supplied in the UK, triggering VAT obligations even without physical presence.

Practical Examples: US SaaS, EU Trader with UK Stock

  • US SaaS company supplying UK consumers → possible UK VAT from first sale
  • EU trader holding stock in UK warehouse → immediate UK VAT registration

Online Sales, Distance Selling and Digital Services

Goods Shipped from Abroad to UK Customers – Post-Brexit Rules

After Brexit:

  • Goods entering Great Britain are treated as imports
  • Distance selling rules changed significantly
  • Import VAT and customs processes now apply

This has altered how vat registration threshold rules apply to overseas sellers.

Digital Services and Online Platforms – Place of Supply

Digital services follow specific place-of-supply rules based on:

  • Customer location
  • B2B vs B2C status

Role of Marketplaces: Deemed Supplier Rules

In some cases, marketplaces account for VAT as the deemed supplier — but this does not remove VAT obligations in all scenarios.

B2B Supplies and the Reverse Charge for Non-Residents

How the B2B Reverse Charge Works in the UK

Under the B2B reverse charge UK non resident rules:

  • The UK VAT-registered customer accounts for VAT
  • The overseas supplier does not charge UK VAT

When Reverse Charge Means You May Not Need to Register

If:

  • You supply qualifying B2B services
  • The customer is UK VAT registered
  • The place of supply is the UK

Registration may not be required.

When Registration Is Still Required Despite Reverse Charge

Registration may still be required if:

  • You also make B2C supplies
  • You hold UK stock
  • You supply goods rather than services

Example Scenarios

  • Overseas consultancy selling only B2B services → no registration
  • SaaS provider selling to consumers → registration required

Voluntary VAT Registration for Non-Resident Businesses

When It Can Make Sense to Register Below Threshold

Some overseas businesses choose voluntary registration to:

  • Recover UK input VAT
  • Prepare for growth

Pros and Cons of Voluntary Registration

Pros: VAT recovery, credibility, planning
Cons: Compliance costs, admin burden, penalties risk

Who Should Consider Voluntary Registration?

Voluntary registration suits businesses with:

  • Significant UK costs
  • Predictable UK growth
  • Professional VAT support

Special Cases and Edge Scenarios

UK Companies with Foreign Directors and No Real UK Presence

UK companies with overseas directors face specific VAT and substance considerations.
(See UK VAT registration for companies with foreign directors.)

One-Off Events, Trade Fairs and Temporary UK Activity

Temporary UK activities can still create VAT obligations and should be assessed carefully.

Changing Business Models

Any change in:

  • Stock location
  • Fulfilment
  • Customer type

Requires immediate VAT reassessment.

Decision Tree: Do You Need to Register for UK VAT Now?

Step 1 – Are You Established or an NETP?

Step 2 – What Are You Supplying (Goods or Services, B2B or B2C)?

Step 3 – Where Is the Supply Made?

Step 4 – Threshold vs First-Sale Rules

Outcomes:

  • Register now
  • Plan for near future
  • No registration (monitor closely)

FAQs – UK VAT Thresholds for Non-Residents

Do non-UK residents need to register for VAT in the UK?

Not always. Registration depends on supply type, place of supply, and NETP status.

What is the VAT threshold for non-resident businesses?

The standard threshold is £90,000, but many NETPs must register from the first sale.

Do I have to register from the first sale if my company is overseas?

Often yes — especially if goods are located in the UK at sale.

Does the VAT threshold apply if I only sell to UK VAT-registered businesses?

Sometimes. The reverse charge may apply, but this must be reviewed carefully.

How does the reverse charge impact registration?

It may remove the need to register for certain B2B services but not for goods or B2C supplies.

Can I deregister later if turnover falls?

Yes, subject to HMRC conditions and future turnover expectations.

Where can I find more detailed step-by-step information?

Use the cluster guides linked:

How Audit Consulting Group Can Help

Understanding VAT thresholds for non-residents and determining when UK VAT registration becomes mandatory can be complex — especially for overseas businesses navigating HMRC rules for the first time.

Audit Consulting Group specialises in supporting non-UK residents and foreign companies with:

  • VAT eligibility and threshold analysis
  • NETP status assessment
  • First-sale and post-Brexit VAT planning
  • VAT registration and HMRC correspondence
  • Ongoing UK VAT compliance and Making Tax Digital

Audit Consulting Group – Accounting and Tax
+44 7386 212550
info@auditconsultinggroup.co.uk

If you would like tailored advice on whether — and when — your business must register for UK VAT, we will be happy to help you review your structure and find the most efficient, compliant solution.