VATREG37050 - Non-established taxable persons (NETPs): introduction

This section of the manual concerns registration for taxable persons who do not have a UK establishment. Schedule 1A was inserted into the VAT Act 1994 when the registration threshold was removed for businesses without UK establishment.

A person [VATREG02100] is liable to register for VAT under Schedule 1A of the VAT Act if they do not have an establishment or fixed establishment in the UK [VATREG37150] and ‘in the course of furtherance of a business’:

  • make taxable supplies of any value in the UK [VATREG02250]
  • intend to make taxable supplies in the UK in the next 30 days.

We refer to such businesses as a ‘non-established taxable person’ or NETP.

NETPs must notify HMRC of their liability to be registered regardless of the value of the taxable supply (prior to December 2012, NETPs benefited from the UK domestic threshold).

NETPs must register within 30 days of making the first taxable supply in the UK or having the expectation to make a taxable supply in the UK. The effective date of registration will be the date of the first supply or the date the expectation to make taxable supplies in the UK first arose. Paragraphs 5(2) and 6(2) of Schedule 1A provides that HMRC can retrospectively register an NETP from the day on which the liability arose, i.e. the date they first made a taxable supply in the UK.

In certain circumstances, a liability to register might arise but the person will not need to become registered. This is usually when the business can apply for exemption from registration or the supplies are subject to the reverse charge mechanism.

The following pages set out the main considerations to help determine if there is a liability to be registered for VAT under Schedule 1A:

  • Is there a UK establishment?
  • Is there a taxable supply in the UK?
  • Is the supply subject to the reverse charge?
  • Is the sale of goods facilitated by an online marketplace?

It also covers information on:

  • Registration and the transfer of going concerns
  • VAT representatives and agents
  • Banking

For the purposes of this guidance:

  • ‘Overseas businesses’ means any person carrying on a business without a UK establishment
  • ‘Non-business customers’ means any person who is not registered for VAT