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VAT Registration & Filing

Value Added Tax (VAT) is a tax that's imposed on most goods and services that VAT-registered businesses provide in the UK.

It's also charged on goods and some services that are imported from countries outside the European Union (EU), and brought into the UK from other EU countries.

VAT is charged when a VAT-registered business sells or provides services to either another business or to a non-business customer.

When VAT-registered businesses buy goods or services they can generally reclaim the VAT they've paid.

You can register for VAT if you're in business and you are one of these:

  • an individual
  • a partnership
  • a company
  • a club
  • an association
  • a charity
  • any other organization or group of people acting together under a particular name, such as an educational or health institution, exhibition, conference, etc

  For VAT purposes, the individual or organization that is in business is known as a 'taxable person'.

There are three rates of VAT, depending on the goods or services the business provides. The rates are:

 Currently there are three rates of VAT:

  • Standard rate – 17.5% Standard rate of VAT increases as of 4th of January 2010*
  • Reduced rate – 5%
  • Zero rate. (This is not the same as being ‘exempt’ or ‘outside of VAT’.)

There are also some goods and services that are:

  • exempt from VAT
  • outside the UK VAT system altogether

VAT is also charged on goods and some services that are imported from countries outside the European Union (EU), and brought into the UK from other EU countries.

VIES

If a UK company carries out sales to other country members of the European Union, it is requested to send us all relevant invoices immediately for a proper registration and filing to the relevant authorities.

EORI

Economic Operators Registration and Identification (EORI) number is the European Union’s unique identification number for use in any electronic communication with Customs authorities of pre-arrival and pre-departure information on all goods entering and leaving the customs territory of the Community and for imports from and/or exports to countries outside the European Union (EU), even on an occasional basis. This includes if you occasionally buy items for your business from outside the EU for example machinery/equipment, goods for exhibition, samples, office supplies etc even though your business is not usually involved in importing or exporting. In addition it will be used for the exchange of information between the customs authorities as well as between customs authorities and other authorities for example other government departments but only in respect of the movement of goods involving a customs procedure.. It is unique throughout the European Community, assigned by a customs authority in a Member State to economic operators (businesses) or persons. By registering for customs purposes in one Member State, an Economic Operator (EO) is able to obtain an EORI number which is valid throughout the Community. The EO will then use this number in all communications with any EC customs authorities where a customs identifier is required for example customs declarations.

We strongly recommend that you submit your EORI application well in advance of when you wish to use the EORI number to avoid delays at import or export.

In order to obtain an EORI number, you must submit an application form by hard copy.

The application form must be fully completed and signed by a responsible person within your business, ie director. Please bear in mind that the acquisition of EORI number is a complicated procedure and all companies will be charged extra for this service.

What is Intrastat?

Intrastat is the name given to the system for collecting statistics on the trade in goods between the countries of the European Union (EU). It has been operating since 1 January 1993, and replaced customs declarations as the source of trade statistics within the EU. The requirements of Intrastat are similar in all Member States of the EU.

Trade statistics are an essential part of the UK balance of payments account and are regarded as an important economic indicator of the performance of the UK; export data in particular is used as an indicator of the state of health of the UK manufacturing industry.

Who has to provide Intrastat information?

All VAT registered businesses must complete two boxes (8 and 9) on their VAT Return showing the total value of any goods supplied to other EU Member States (known as dispatches) and the total value of any goods acquired from other EU Member States (known as arrivals).

In addition to this, larger VAT registered businesses must supply further information each month on their trade in goodswith other EU Member States.

If a business dispatches goods to other EU Member States or receive arrivals of goods from other Member States with a value exceeding a legally set threshold (see paragraph 3.1), then they must submit the additional information.

To do this they use a form known as a Supplementary Declaration (SD). The thresholds, which may differ for arrivals and dispatches, are reviewed annually, with any change normally announced towards the end of the preceding year. Changes will only apply from the beginning of a calendar year and businesses should ensure that they operate according to the threshold level currently set. For further information on the rules for submitting Intrastat see Section 3.