To register for VAT or not?

[hawami]

Hello, all!

I run a global trading company out of the USA. We have some shipments that will come directly from Asia into UK. I will be paying for all relevant duties/VAT. And I will of course be applying for EORI.

My question is... what are the benefits of registering myself as a business in the UK. I understand you can claim the VAT etc...

But I am wondering if it is just an added hassle to register as UK company at this point. I am a US citizen, which mean my income tax is taxable worldwide anyway.

I understand corporate tax rate is relatively lower in the UK than in US...

Any other benfits to why I should register myself as a business in the UK?

Thank you in advance!

 

[KidsBeeHappy]

Are you selling in the UK?
And who are you selling to - consumers or businesses?
What are you selling?
Are you selling online?

I think, that it is highly probable that you will have to account for VAT in the UK if you are selling to consumers. Regardless of whether you a company or not.

Please note that VAT is a sales tax, and therefore additional to income tax.

 

[vinaayreddy]

VAT : Value added tax

Its required to pay

 

[Mike George]

Have a look at the HM Revenue and Customs site at www.hmrc.gov.uk

 

[boogs]

There may still be some tax advantages to you setting up a separate UK company and to register for VAT. I suggest you speak to an international tax advisor.

 

[adz1000]

Its my understanding that a US company doesnt need to charge VAT to UK consumers. Only EU companies e.g. a french company, that would need to charge VAT to a UK consumer or company if they sell to another company in europe. USA is a different story.
Equally, a UK company can sell to a US company and not add VAT to the bill.
i.e. a UK company only needs to add VAT to the bill if selling to the UK or another EU member state. Selling to anywhere else in the world would not require adding VAT to the invoice.

Shipments that coming directly from Asia into UK shouldnt incure any UK VAT. I'm not sure about the Asia tax rules however. What you may be liable to pay is some kind of import tax (something that is outside of the scope of my knowledge). What is also outside of my knowledge is a US company with a UK base importing good from Asia. The US company may or may not need to pay import tax (not sure).

There are many rules surrounding VAT with regard to international trade. You should look into VAT rules where an international company has a fixed base in the UK (assuming you do have a fixed base in the UK).

One benefit i can think of for registering as a UK business is that you can invoice your UK customers from a UK company rather than a USA one. This is likely to be more appealing to UK companies depending on what line of business you are in.

I would say though, if you're just a small business e.g. just you, then it may turn out overly complicated to administer and understand.

Good luck!