How to register LTD company to VAT?

We begin today with VAT registration in UK.

Registering for VAT is an onerous process that can take from 3 weeks up to 3 months.  Unfortunately, simply filling in the VAT registration form does not guarantee success. Not everyone wants to buy a ready-made company with an active VAT number. Therefore, in this article we will tell you how to register a LTD company for VAT in the UK.
There are two ways to register for VAT:

  1. paper (traditional method – rarely seen)
  2. electronically (preferred method)
    Before signing up, we must be sure that the company has been properly established and we have all the documents from the Companies House. You do not have to have a Tax Identification Number (UTR) – but if you own it – we will immediately register your corporation with Corporation Tax.

Here we go
Prepare the following items:
1. Print company documents (incorporation certificate along with other documentation)
2. Go to hmrc.gov.uk  and create an account that will consist of a login and password.

Alternatively, use the paper form for VAT

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/606422/VAT1_04_17.pdf

VAT registration is divided into 3 sections:

  1. About business
  2. About VAT registration
  3. About you

In these sections you are required to provide proper data. We will begin by briefly discussing Section 1 „About Business”.

 

SECTION 1 „About Business”

  1. Business status – we indicate whether it is a one-person host or a limited liability company (LTD company)
  2. Trading name – the trade name of the company – we only provide if the business has an alternative name other than the company name and we want to use it in the case of registration for VAT
  3. Date of company registration, certificate number and country of incorporation (for British companies – of course, United Kingdom)
  4. A very important section is the contact details (here we give you a valid +44 fax number, fax number, company email address and company website) – do not ignore this section because HMRC officials may try to contact us.
  5. Subject of business – we define with the SIC codes – the main and additional items – the main object of activity is the most important because it will appear on the VAT certificate>
  6. Director’s involvement in other companies registered for VAT (in the case of management of other companies the company name and possibly the VAT number should be included)
  7. Bank account details of the company (if the company has a bank account) – here only the English bank account with account number and sortcode are provided)

SECTION 2 „About VAT Registration”

In the section „About VAT registration” we are obliged to provide the following data:

1. Indicate whether the VAT registration is made in connection with exceeding the VAT registration thresholds, at this moment it is the revenue of £ 83,000 per year or the VAT registration is on request of the taxpayer (voluntary registration).
2. Specify the forecasted turnover on your VAT account and indicate whether it will be domestic sales, domestic purchases or EU sales from country to country, as well as export and import of goods or services. These turnovers are annualized.

 

SECTION 3 „About You”

In the last section „About you” we provide our personal information such as:

  1. Name and surname
  2. Date of birth
  3. Address of residence
  4. Contact phone
  5. NIN number.

We end the application for VAT registration by signing and typing the appropriate date. In the case of electronic registration via hmrc.gov.uk, we must confirm the application by authorizing login via login and password. In the case of paper filling we still send applications along with all attachments to:

HMRC VAT Registration Service
Crown House
Birch Street
Wolverhampton
West Midlands
WV1 4JX

What if the director is a non-resident?

You do not have to provide a NINo number in your electronic VAT application. In this case, we may alternatively use a national tax identifier – Country tax residence.
If we select the option that we do not have „NINo”, the application wizard will force us to attach various documents in the form of scans that confirm our personal data.

The following documents are currently accepted:

  1.  Confirmation of identity – passport or ID card or driving license
  2.  Proof of address – confirmation of address of residence, bill for utilities – consumption of electricity, gas, water or other official document on your name and address *
    * Document can not be older than 90 days.

This is where the VAT registration ends. The waiting time for checking the application is 14 days in advance. If the HMRC will be satisfied with the data provided, it will give you a VAT number for the company that you can check on the VIES website. This is usually the case for counterparties who work with the taxpayer to issue an invoice and send the goods. If the HMRC is in doubt or wishes to make certain additions to the application, it will send a letter to the taxpayer after 14 days in which it will specify the information it requests.

Sample HMRC requirements for additional letter:

  • Describe who are the business partners / partners of the company LTD registered for VAT.
  •  Identify the subject of the activity and describe how the business operates
  •  Indication of trading address for a company other than a virtual office (retail, warehouse, office or other physical entity)
  • Indication of the company’s website
  • Demonstrate that VAT in the UK will be taxable.

Let us remember that the above criteria are individual for each company. Not every company should also receive VAT. For example, if your total sales are outside the UK, you must register in the country where the goods and services are delivered.  If LTD is only registered in the United Kingdom, and in fact does not work here, there are no business partners and goods out of here do not leave, there is no chance to receive VAT.
Customers do not like waiting for long-term VAT registration. Let’s think how much time we can lose, waiting 3 months for VAT registration. Until then, we can not issue or accept any invoice.

How to solve the problem with VAT?

You may wait for your VAT registration and receive an active VAT number from HMRC or you will not receive it. If you need to start a business from tomorrow and you already have the goods to buy or your counterparts are waiting and you do not want to incur losses and you want to be financially sound, do not waste any more time and see our list of companies for sale.

UK VAT Rates and in EU/EOG

VAT in European Union Countries

Turkey 18%
Switzerland 8%
Sweden 25%
Spain 21%
Slovenia 22%
Slovakia 20%
Romania 24%
Portugal 23%
Poland 23%
Norway 25%
Netherlands 21%
Luxembourg 15%
Lithuania 21%
Latvia 21%
Italy 22%
Ireland 23%
Hungary 27%
Greece 23%
United Kingdom 20%
Germany 19%
France 20%
Finland 24%
Estonia 20%
Denmark 25%
Czech Republic 21%
Croatia 25%
Belgium 21%
Austria 20%

The data shows that the lowest VAT rates apply in Switzerland and Luxemburg and the highest in Sweden, Norway and Croatia. In the UK, the basic VAT rate is 20%.

VAT Rates in United Kingdom

The basic VAT rate for most goods and services is 20%.  You should know examples of services with a 20% rate:

  • web development services
  • consulting
  • specialized and non-specialized sales
  • transport activities
  • cleaning service

Another reduced rate is 5%.   Types of services with this rate:

  • electricity for households

The 0% rate applies to children’s articles and clothes. There is also a exclusion from VAT application. Sample services:

  • stamps
  • financial intermediation services
  • real estate transactions or business sales

 

Do not charge VAT

  1. SITUATION A    if the services are exempt from VAT
  2. SITUATION B    – If your services or sales are outside the United Kingdom, you must register for VAT in your country of sale. For example, if you have an online store and your shipping location starts in Germany, VAT is applied in Germany. You are not required to register for VAT purposes in the UK (in the case of mail order sales).

If you do not know what your VAT rate is, check the Notice or contact HMRC:

Full adress:

HM Revenue and Customs – VAT Registration Service  Imperial House 77 Victoria Street DN31 1DB Grimsby United Kingdom