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United Kingdom

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United Kingdom has a value-added tax (VAT) system known as "VAT'' with a standard rate of 20% and reduced rates of 5% and 0% for certain goods and services.

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Fiscal representation in United Kingdom

The fiscal representative is responsible for ensuring that the non-resident company complies with all UK VAT rules and regulations, including the submission of VAT returns and payment of VAT, as well as representing the non-resident company in any tax-related matters or disputes.

In general, a fiscal representative is required when a non-resident company has no permanent establishment or fixed place of business in the UK.

UK VAT reverse charge

The registration status of a non-established supplier is not relevant when they provide services to a UK business because the responsibility for accounting for Value Added Tax (VAT) in such transactions falls on the UK business as the recipient of the services.

In the case of cross-border services, the recipient of the services is required to account for the VAT under the reverse charge mechanism, regardless of whether the supplier is registered for VAT or not. This means that the UK business must report the VAT on their own VAT return and simultaneously claim it as input tax, resulting in a net-zero effect on their VAT liability.

- UK reverse charge on B2B Services

Scope of Application: The reverse charge on B2B services generally applies when services are provided by a non-resident supplier to a VAT-registered business in UK.

-Domestic reverse charge is mandatory when non-established companies sell goods B2B in UK

When a non-established company, meaning a company without a fixed establishment or permanent establishment in the UK, sells goods to another VAT-registered business in UK, the domestic reverse charge mechanism may apply.

Frequency of UK VAT returns

  • Monthly Returns: businesses with an annual taxable turnover above a certain threshold, which is £2.3 million . Additionally, certain businesses may choose to voluntarily file monthly returns even if they are below this threshold.urns.

  • Quarterly Returns: Standard reporting period

  • Annual Returns: businesses with a turnover below £1.35 million

UK VAT compliance - What Global Trade can help you with

  • VAT Registration: Businesses meeting the threshold for VAT registration must register with the UK tax authorities to obtain a VAT number. This enables them to charge, collect, and remit VAT on their taxable supplies.

  • VAT Rates and Invoicing: Businesses must correctly apply the appropriate VAT rates to their goods or services and issue valid VAT invoices to customers. Invoices should contain specific information required by Spanish VAT regulations.

  • VAT Reporting and Returns: Businesses are responsible for submitting regular VAT returns to the tax authorities, reporting their VAT liabilities and input tax credits. Returns must be filed within the prescribed deadlines and reflect accurate calculations.

  • Intrastat Reporting: If a business exceeds the threshold for intra-EU trade, they may be required to submit regular Intrastat returns. Intrastat reports provide statistical information on the movement of goods between EU member states.

  • Reverse Charge Mechanism: Businesses should understand and apply the reverse charge mechanism correctly in specific situations where the recipient is responsible for reporting and paying the VAT instead of the supplier.

  • VAT Compliance Documentation: It is important to maintain proper records and documentation to support VAT transactions, including invoices, VAT certificates, and relevant business documents.

  • Compliance with VAT Rules and Regulations: Businesses should stay updated with any changes or updates to Spanish VAT legislation and ensure compliance with all applicable rules and regulations.

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