VATREG23250 - Voluntary registrations: persons who do not make or intend to make taxable supplies in the UK: who can register?
Person making supplies covered by Schedule 1, 10(1)(a)
Persons who
- make no taxable supplies in the UK, but
- make supplies covered by Schedule 1, 10(1)
are eligible for registration only if
- they have a business establishment or usual place of residence in the UK, and
- they receive taxable supplies from UK VAT-registered businesses, for which they are entitled to recover input tax, or
- they receive taxable supplies from another Member State which are subject to the reverse charge, or
- they import goods into the UK, for which they are entitled to recover input tax.
For these purposes, a business establishment includes a branch or agency of the overseas business through which it carries on a business in the UK.
An overseas business has a branch in the UK if it maintains a permanent office at which it employs staff.
It has an agency in the UK if it has a permanent UK agent who enters into contracts for the purchase of goods and services or for the import of goods in its name on a regular basis. An agent who merely acts as an intermediary in bringing together customer and supplier, but who is not directly involved in the supply chain, does not constitute an agency.
Note: It is not necessary for the supply to be made from the UK establishment. In other words, an international entity with a UK establishment would be entitled to register provided it makes relevant supplies somewhere in the world.
Where a business provides book-keeping, accountancy or invoicing services at its premises for a non-UK person who does not actually make supplies in the UK, these premises are not considered to be a business establishment.
Person making supplies covered by Schedule 1, 10(2)(b)
Under Schedule 1, 10 (b), a person is also entitled to register if they make certain exempt supplies of financial services
- to a person who belongs outside the UK
- which are directly linked to the export of goods to a place outside the UK
- which consist of the making of arrangements for such supplies above
provided those supplies are of the kind described in the “SI 1999/3121 - VAT (Input Tax) (Specified Supplies) Order 1999” (that is, they would have been exempt by virtue of any item of the VAT Act 1994, Schedule 9, Group 2 (insurance) or any of Schedule 9, Group 5 (finance), items 1-8). Businesses that make only such supplies are entitled to register for VAT.