UK VAT Threshold Question


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Hey guys,


Within a year I will be in a position where my turnover on one of my companies should exceed the threshold of £85,000.


However, around 35-40% of my total sales come from people outside of the UK (mainly the US & Canada), so my questions are:


1) Do these international payments contribute to the £85,000 threshold, or is that a domestic threshold?

2) In the scenario that I do register for VAT, do these companies outside of the UK need to be charged VAT?



Probably quite a 'noob' question, but I just wanted to clarify!


Thanks guys
 
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Hi

Excellent question.

The sales outside UK do not form part of the vat for the purpose of the threshold. Some inspectors get this wrong, and I won against a vat inspector on this basis for a client.

https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad#vat-on-exports



Kind regards
Interesting to know that. The OP mentioned having several companies
Hey guys,


Within a year I will be in a position where my turnover on one of my companies should exceed the threshold of £85,000.


However, around 35-40% of my total sales come from people outside of the UK (mainly the US & Canada), so my questions are:


1) Do these international payments contribute to the £85,000 threshold, or is that a domestic threshold?

2) In the scenario that I do register for VAT, do these companies outside of the UK need to be charged VAT?



Probably quite a 'noob' question, but I just wanted to clarify!


Thanks guys
it’s interesting what hirschcogmail-com replied to you.
On another tack, surely the sum turnover of all your companies needs to be taken into account re the £85K threshold?
 
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Interesting to know that. The OP mentioned having several companies

it’s interesting what hirschcogmail-com replied to you.
On another tack, surely the sum turnover of all your companies needs to be taken into account re the £85K threshold?

Hey Planner,


Thanks for commenting! I think you are on the right track, If I was a sole trader then yes all of these companies would combine!


But I am a director of 3 LTD's, all in different industries! So they are all their own entities and have their own VAT threshold.


After doing a lot of research into this, yes most international sales don't contribute to your VAT threshold however I would verify that with an accountant!
 
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Hi

It does not matter what your turnover sales outside the UK (except EU) do not qualify for vat. If your UK turnover
exceeds the vat threshold then you have to register for vat. Unless you do vat planning to avoid vat.



Accountant and TAX VAT PAYE Consultants
 

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