DMBM530120 - Debt and return pursuit: VAT: liability for payment: Non-Established Taxable Persons (NETPs)
Some content of this manual is being considered for archiving. If there is content you use regularly, please email hmrcmanualsteam@hmrc.gov.uk to let us know as soon as possible.
Definition of NETP
A non-established taxable person who is:
- not normally resident in the UK
- does not have a place of business in the UK
- is not incorporated under UK law but,
- makes taxable supplies in the UK
NETPs may register for VAT in any of the following ways
- directly with Aberdeen (050 traders)
- via a UK tax representative or,
- via a UK agent.
VAT Representatives
Tax representatives are liable together with the taxable person for rendering returns and paying tax due. Section 48 (3)(c) of the VAT Act 1994, provides:
“48 (3) Where any person is appointed by virtue of this section to be the VAT representative of another (his principal), then, subject to subsections (4) to (6) below, the VAT representative
(c) Shall be personally liable in respect of
(i) any failure to secure his principal’s compliance with or discharge of any such obligation or liability; and
(ii) anything done for purposes connected with acting on his principal’s behalf,
as if the obligations and liabilities imposed on his principal were imposed jointly and severally on the VAT representative and his principal.”
As a matter of policy, take recovery action against a VAT representative only when
- you can take no further action against the taxable person and
- a debt for which the VAT representative is liable remains unpaid.
The VAT representative’s status is to be verified by reference to:
- the VAT 1TR; or,
- a letter signed by the authorised officer confirming his official representative status.
It is good practice to notify a VAT representative of his liability under the Act where we start proceedings against the taxable person.
UK agents of non-established taxable persons
A NETP may opt to appoint an agent in the UK to act on his behalf. UK agents are not liable for debts incurred by the taxable person.