VAT UK Guide

UK VAT key facts (2026)

Register for VAT in the UK with Taxually: CrossTax handles your UK VAT registration and returns.

Are you planning to expand your business into the United Kingdom but don’t know if you’ll need to register for VAT (Value Added Tax)? Then read our VAT UK guide where we explain how the VAT system works in the United Kingdom post-Brexit.

Updated October 2026: We corrected the registration threshold and zero-rating wording, updated late payment penalties to the April 2025 rates and Intrastat rules for Great Britain, and added sections on non-UK registration, low-value imports and the 2029 e-invoicing mandate.

What is the VAT rate UK?

The UK has two VAT rates - a standard UK VAT rate of 20% and a reduced rate of 5%. Since leaving the European Union on January 1st, 2021, the UK is no longer subject to the EU VAT directive and now sets its own VAT rules and policies in full.

Many items, including books, newspapers, periodicals, children’s clothes, and passenger transport, are zero-rated (0%). Zero-rated is not the same as exempt: zero-rated sales still count as taxable turnover.

Registering for UK VAT

As a result of the UK’s exit from the European Union, the EU distance sales VAT registration threshold no longer applies to sales to the UK. An exemption exists for goods sold between Northern Ireland and the EU, though this doesn’t include sales of services. So, for non-UK businesses, UK VAT registration becomes an obligation from the first B2C sale.

You will be required to register for a UK VAT number if you store goods in a UK fulfillment center or warehouse, your UK taxable turnover goes over £90,000 in a rolling 12-month period (UK businesses), or you are based outside the UK and make any taxable supplies in the UK. There is no threshold for non-UK businesses, and the EU-only distance selling threshold no longer applies.

You can register for VAT UK online or you can do it by post. You should receive your UK VAT registration number and VAT registration certificate from the HMRC within 30 days.

Fiscal representative UK

Under most circumstances, EU and non-EU businesses are not required to appoint a fiscal representative when registering for VAT in the UK.

How do non-UK businesses register for UK VAT?

A business based outside the UK must register for UK VAT as soon as it makes, or expects to make within 30 days, any taxable supply in the UK. There is no turnover threshold for non-established businesses.

• When to apply: Register before your first UK taxable sale, for example when you start selling goods held in a UK warehouse.
• Exemption: If all your UK sales are zero-rated, you can ask HMRC for an exemption from registration.
• How to apply: Most businesses apply online with a Government Gateway account. HMRC then issues a VAT number and certificate.
• After registration: You must keep digital records and file returns through Making Tax Digital compatible software.

See GOV.UK: Register for VAT for the full rules.

Low-value imports and online marketplaces

For goods sent from outside the UK in consignments worth £135 or less, VAT is charged at the point of sale, not at import. Either the seller or the online marketplace collects it.

• Direct sales: An overseas seller selling straight to Great Britain consumers must register and charge UK VAT on these consignments.
• Marketplace sales: If the sale goes through an online marketplace, the marketplace is treated as the seller and accounts for the VAT.
• Business customers: If the buyer gives a UK VAT number, the seller does not charge VAT. The buyer accounts for it instead.
• Above £135: Normal import VAT and customs duty apply at the border.

Northern Ireland follows different rules. Sources: GOV.UK guidance on overseas goods and HMRC VAT Registration Manual VATREG37210.

E-invoicing in the UK

The UK will make e-invoicing mandatory for all VAT invoices from 2029. B2C sales are not included.

The government confirmed the plan in November 2025. It will use a decentralised model, and real-time reporting will not start with the mandate. A detailed roadmap is due at Budget 2026. Source: HMRC consultation response on e-invoicing.

UK VAT return filing and penalties

Your UK VAT return can be submitted monthly or quarterly. The majority of returns are made every three months, however, if a business’s annual VAT liability is over £2.3 million, payments due must be made on the last of the second and third months of each VAT quarter. 

The deadline for UK VAT submissions is one calendar month and seven days following the end of the previous accounting period.

If you submit your UK VAT return late you’ll receive a penalty point and once you’ve reached a penalty point threshold you’ll be fined £200. This threshold is set by your accounting period. A further £200 will be added for each subsequent late submission.

There is no late payment penalty if you pay within 15 days. From day 16, the first penalty is 3% of the VAT still unpaid at day 15. From day 31, a further 3% of the VAT unpaid at day 30 is added, plus a daily penalty at 10% a year until you pay. These rates have applied since 1 April 2025. Late payment interest is also charged from the first day.

UK Intrastat declarations

Businesses in Great Britain no longer submit Intrastat declarations for goods moved between Great Britain and the EU, for either arrivals or dispatches. Any business moving goods between Northern Ireland and the EU (import and export) will be required to submit Intrastat returns if they exceed the threshold. The thresholds are imports exceeding £500,000 and exports exceeding £250,000.

Reverse charge in the UK

In the UK, the reverse charge mechanism is a VAT accounting procedure where the responsibility for reporting and paying VAT shifts from the supplier to the customer for certain goods and services. This applies to services purchased by UK VAT-registered businesses outside of the UK. In this case, the customer, instead of the supplier, must account for the UK VAT on their VAT return.