Companies that are involved in providing taxable services and supplies and have crossed a VAT registration threshold of GBP 85,000 will have to proceed with the VAT registration process. Once VAT registered, the company will be provided with a valid VAT identification number. This is a unique identification number in the format GB 111.1111.11. If the company is involved in buying and selling of goods in other EU counties, then they might have to register there as well.
Once registered, the company will have to follow the VAT compliance process. This process includes maintaining and submission of various returns and statistical reports on time at regular intervals. The main obligations as per the UK VAT law are as follows:
- VAT Return
This is a summary of the VAT due to the HMRC. It clearly summarises all the sales and purchase transactions carried out by the business over the taxable period. A VAT return is generally submitted every quarter.
- EU Sales List
A registered business which is involved in sale of goods or services in the other EU member state is required to submit an EU Sales List. The information required to complete an EU Sales List includes the customer’s country code, unique VAT identification number and an indicator which is used to identify if the sale made was related to goods or services.
- Intrastat
An Intrastat is a statistical declaration submitted by a registered business when involved in trading of goods with other EU countries. Intrastats can be of two kinds:
- Intrastat Arrivals: It involves acquisition of goods from other EU countries
- Intrastat Dispatches: It involves sale of goods to other EU countries
Businesses which are EU VAT registered are required to comply by the EU VAT regulations. These set of EU VAT laws are listed in the VAT Directive set by the European Union in Brussels. All the member states of the EU are expected to implement these VAT compliance obligations.
