Uk company registration & VAT

[DENDEN76]

Hi

If I'm currently being charged vat on all my sales as a foreign company selling in the uk, is it possible for me to register a uk company in order to avoid the vat charges on my sales.
I understand there's a 85k a year threshold which I'm currently under.

As a foreign uk company owner will this allow me to avoid charging UK customers VAT?

Thanks

[OldTom]

Nope, there's no legal way around it.

[DENDEN76]

Alright thanks

[murdered_by_ebay]

Originally Posted by OldTom

Nope, there's no legal way around it.

do not mislead people , it would be perfectly legal to open a UK company and sell below the threshold without charging VAT

there is another problem here , it is particularly with ebay. ebay do not accept non-residents , it is not a legal obligation but they do it this way so that a foreign resident having a UK limited company would not be able to pass verification unless they have at least one director who is a resident

otherwise it would even be legal to have 5 limited companies and use 5 VAT thresholds under the condition that they all would be running separate businesses not related to each other but such a scheme would likely cause a tax investigation at some point

[OldTom]

Originally Posted by murdered_by_ebay

do not mislead people , it would be perfectly legal to open a UK company and sell below the threshold without charging VAT

LOL, I'll almost 100% guarantee that from what OP has said they would be classed as a non-established taxable persons (NETP) and as such does not have any vat free allowance.

Indeed, VAT registration is mandatory.

[DENDEN76]

Ignore that

[murdered_by_ebay]

Originally Posted by OldTom

LOL, I'll almost 100% guarantee that from what OP has said they would be classed as a non-established taxable persons (NETP) and as such does not have any vat free allowance.

Indeed, VAT registration is mandatory.

UK company can not be non-established , the very fact of being incorporated in the UK makes it a resident

[OldTom]

Originally Posted by murdered_by_ebay

UK company can not be non-established , the very fact of being incorporated in the UK makes it a resident

Not true. Go look up the definition of a resident with regards to a Limited Company. Spoiler alert...it specificity states that virtual/accommodation addresses for non-residents do not count and you would be considered as a NETP.

[murdered_by_ebay]

Originally Posted by OldTom

Not true. Go look up the definition of a resident with regards to a Limited Company. Spoiler alert...it specificity states that virtual/accommodation addresses for non-residents do not count and you would be considered as a NETP.

HMRC sees such companies automatically as resident , it would take a tax investigation to change anything substantial there as they have no idea if he imports any goods into the UK and sells there or just ships from abroad or imports into fulfillment and ships from there or has an address of his own with employees to conduct sales from , all this does not get determined by default

same thing with running several limited companies and using a separate threshold on each , this can only be changed after it gets investigated and determination is made it is not supposed to happen , until then it may take years

I think the guy wouldn't care less if he is located abroad , the only real issue here is that ebay would not allow this

on the other hand , amazon would...

[OldTom]

Originally Posted by murdered_by_ebay

HMRC sees such companies automatically as resident , it would take a tax investigation to change anything substantial there as they have no idea if he imports any goods into the UK and sells there or just ships from abroad or imports into fulfillment and ships from there or has an address of his own with employees to conduct sales from , all this does not get determined by default

same thing with running several limited companies and using a separate threshold on each , this can only be changed after it gets investigated and determination is made it is not supposed to happen , until then it may take years

I think the guy wouldn't care less if he is located abroad , the only real issue here is that ebay would not allow this

on the other hand , amazon would...

Finally, we are agreed that there is a NETP issue with regards to business activity for any given address. I did initially say there was no legal way to do it, if OP wanted to lie to HMRC then that's their business.

Ironically, whilst Amazon would allow it, they will be the first to raise VAT issues for a non-resident director. Many posts on their own forum about it.

Lets not forget that OP has already been tackled over VAT, that has nothing to do with the mechanics of their business arrangements, it's because he's a non resident and a deemed a NETP. You and I both know he cannot claim it back because he has no 85K allowance, a Limited Company won't change that.

[murdered_by_ebay]

Originally Posted by OldTom

Finally, we are agreed that there is a NETP issue with regards to business activity for any given address. I did initially say there was no legal way to do it, if OP wanted to lie to HMRC then that's their business.

Ironically, whilst Amazon would allow it, they will be the first to raise VAT issues for a non-resident director. Many posts on their own forum about it.

Lets not forget that OP has already been tackled over VAT, that has nothing to do with the mechanics of their business arrangements, it's because he's a non resident and a deemed a NETP. You and I both know he cannot claim it back because he has no 85K allowance, a Limited Company won't change that.

the issue is not with non-residence but only with establishment , non-resident is still allowed

it is not that critical for a small seller if they can continue selling , potentially for a long time until they get problem with this if this happens at all

a large seller with sufficient funds can take steps to obtain paperwork for this , probably 1-2 formal employees and proof of an address would be sufficient

[DENDEN76]

Thanks guys. I will also consult the market place.

[OldTom]

Originally Posted by murdered_by_ebay

the issue is not with non-residence but only with establishment , non-resident is still allowed

it is not that critical for a small seller if they can continue selling , potentially for a long time until they get problem with this if this happens at all

a large seller with sufficient funds can take steps to obtain paperwork for this , probably 1-2 formal employees and proof of an address would be sufficient

This isn't a question of whether they can continue selling, they're already selling. I believe OP is a dropshipper.

A Limited Company wont allow then to negate their VAT status, you've finally agreed with me.

HMRC have said that if they find sellers who try and abuse it they will hold the selling platform liable for the VAT. Probably why Amazon are red hot on it and maybe why ebay have simply washed their hands of it as you mentioned earlier.

As for your final solution then yes, that would potentially be a work-around, albeit an expensive one, probably more than their paying in VAT, but in any event we both know that's simply not going to happen for OP is it?

[murdered_by_ebay]

Originally Posted by OldTom

This isn't a question of whether they can continue selling, they're already selling. I believe OP is a dropshipper.

A Limited Company wont allow then to negate their VAT status, you've finally agreed with me.

HMRC have said that if they find sellers who try and abuse it they will hold the selling platform liable for the VAT. Probably why Amazon are red hot on it and maybe why ebay have simply washed their hands of it as you mentioned earlier.

As for your final solution then yes, that would potentially be a work-around, albeit an expensive one, probably more than their paying in VAT, but in any event we both know that's simply not going to happen for OP is it?

setting up UK limited and fulfillment in the UK like the chinese do it would be a solution , it is a question of how sophisticated one is

the other issue is of course that amazon do not work by the rules but do whatever they like frequently asking for documents that are not required by any law

[maria2024]

Hello ,

Firstly, I hope you're all having a wonderful start to the New Year! I'm reaching out with a query that I hope some of you might be able to shed light on.

Recently, due to the implementation of new regulations, I ceased my eBay selling activities, as I was previously using a friend's details and I don't want to risk any complications for him.

I've come across a situation where eBay seems to restrict the creation of Limited company accounts for non-UK residents, and I'm considering a potential solution. My plan is to establish a Limited company with both myself and my friend as directors. I would then update my eBay account to reflect this new business structure. After about a month, I am thinking of removing my friend as a director from the company.

My question is, would this action create any issues with eBay or HMRC? I'm also curious if this strategy could be applicable for those using stealth accounts. Once the UK resident is no longer part of the Limited company, I intend to manage tax obligations directly with HMRC under the company's name. However, I'm unsure if this would lead to any complications.

Any insights or experiences you can share on this matter would be greatly appreciated!

Best regards,

Originally Posted by murdered_by_ebay

do not mislead people , it would be perfectly legal to open a UK company and sell below the threshold without charging VAT

there is another problem here , it is particularly with ebay. ebay do not accept non-residents , it is not a legal obligation but they do it this way so that a foreign resident having a UK limited company would not be able to pass verification unless they have at least one director who is a resident

otherwise it would even be legal to have 5 limited companies and use 5 VAT thresholds under the condition that they all would be running separate businesses not related to each other but such a scheme would likely cause a tax investigation at some point

[murdered_by_ebay]

biggest risk is that at some point adyen would review the company details again as uk financial companies are obliged to verify each limited company regularly so that a change in details on companies house would catch attention at some point

[maria2024]

Thank you for your reply. Would it matter if the directors are changed as the company will still be running just the director wont be uk national