The UK VAT registration threshold for overseas sellers

The figure and the two tests

Either test triggers registration on its own. The backward look asks whether taxable turnover for the last 12 months has gone over £90,000 - any 12 months, not a tax year. The forward look asks whether you expect to cross it in the next 30 days alone.

The rolling window is what catches people out. There is no April reset to plan around: the twelve months you are measured over move with you, so one strong quarter can push you over on revenue that spans two accounting years.

What counts as taxable turnover

• Standard-rated, reduced-rated and zero-rated sales - zero-rated is taxable at 0%, and it counts
• Goods hired or loaned to customers, and business goods taken for personal use
• Services bought from overseas suppliers that you had to reverse-charge onto your own return

Exempt and out-of-scope supplies sit outside the test. If everything you sell is exempt, you can trade well past £90,000 without ever being required to register.

What HMRC actually requires

HMRC's term for this is a non-established taxable person - a business with no fixed establishment in the UK. A UK customer base does not create one, and neither does a .co.uk domain, a UK bank account, or stock sitting in someone else's fulfilment centre.

A fixed establishment needs human and technical resources of your own, permanently in the country. Most cross-border SaaS and ecommerce businesses selling into the UK never acquire one, which is precisely why the £90,000 never becomes available to them.

Why the £90,000 gets quoted at you anyway

Almost all UK VAT guidance is written for UK businesses, because almost all of its readers are UK businesses. The threshold pages, the accountancy blogs and the bookkeeping-software defaults assume an establishment that an overseas seller does not have.

The result is a seller who watches a number they were never subject to, waits patiently for £90,000, and registers two years after the liability started. The threshold being tracked is the wrong one.

Digital services and other supplies to consumers

A B2C supply of digital services is made where the customer belongs, so a sale to a UK consumer is a UK supply and registration is due from the first one. There is no UK equivalent of the EU's €10,000 micro-business allowance.

B2B is different. Where the general place-of-supply rule applies, a service sold to a UK business is reverse-charged - the customer accounts for the VAT on their own return, and supplies like that do not put you under a registration obligation.

Goods sent from outside the UK

The £135 is the value of the whole consignment, not of each item in it, and it excludes transport, insurance and duties shown separately. Two £80 items shipped together are over the line; the same two shipped separately are not.

The business-to-business row only holds if the customer gives you their UK VAT number. Without one you are treated as selling to a consumer, whatever the buyer says they are.

When the marketplace owes it instead of you

Where an online marketplace facilitates the sale, HMRC makes the marketplace liable for the VAT on £135-or-less consignments sold into Great Britain, and on goods of any value that are in the UK at the point of sale and sold by an overseas business.

That shifts who accounts for the tax; it does not make the sale disappear. A seller running a marketplace channel alongside its own storefront is still registrable on the direct sales - and those are the ones worth watching.

The deadlines

1. 1Establish which test you are underNo UK establishment means no threshold, and the trigger is the first taxable supply rather than any turnover figure. Everything below applies to UK-established businesses.
2. 2If you crossed on the backward lookRegister within 30 days of the end of the month you went over. Registration takes effect on the first day of the second month after that.
3. 3If you are on the forward lookRegister by the end of the 30-day period. Registration takes effect on the day you realised you would cross, not the day the turnover arrived.
4. 4Charge from the effective date, not the approval dateHMRC backdates registration to the effective date. VAT is due on sales from that day whether or not your number had come through yet.
5. 5File under Making Tax DigitalReturns are quarterly by default and must be submitted from compatible software. VAT-registered businesses have had no manual option since April 2022.

What a late registration costs

The VAT is due from the effective date whether you charged it or not, and you cannot go back and invoice past customers for it. At a 20% standard rate, unbilled UK VAT comes out of margin that has already been spent.

On top of that sits a failure-to-notify penalty, set as a percentage of the tax that should have been paid. The percentage turns on behaviour and on who raised it first: an unprompted disclosure is materially cheaper than one made after HMRC asks.