What is UK VAT, how is it used and when is it required?

The UK VAT registration has a number of functions, well beyond the new EU Special VAT schemes. 

To start with, for non-UK customers not warehousing goods in UK, the UK VAT scheme for Low-Value Consignments allows for simplified customs process and collection of VAT at checkout for goods valued below £135. In other words very much the same as EU IOSS. 

To make sure you are providing a good customer experience, we recommend taking advantage of the UK VAT scheme. It means lower shipping costs and faster delivery. And, most importantly there are no post-sale actions required from the end customer which directly reduces returns significantly. 

Going above the £135 threshold, customs procedures are normal. For the above the threshold shipments, you should find a reliable and capable courier and set up a Delivery Duty Paid (DDP) delivery method to UK. DDP removes the requirement for you to be registered for UK VAT as the VAT is collected at customs and invoiced to seller by the logistics partner. DDP is, as you probably guessed, much more expensive. Do not send DDU, it is poor customer service. 

If you are warehousing goods in UK or using UK based Print-On-Demand services, you are obligated to register for UK VAT. The registration allows you to deduct the paid VAT from your UK sales VAT. You will have to arrange for cost side accounting, EAS can provide you with full domestic sales data as well as possible IOSS on shipments to EU. 

Unlike IOSS, reporting and payment of UK VAT are done quarterly. Failure to do so can put an end to your business and result in substantial punitive fees. Your accountant should be capable of handling the limited accounting requirements on the cost side. If you are only selling, not buying anything in UK with VAT, you will get the data set for filing from EAS. 

The registration is not quite as efficient as IOSS registration in some EU countries, it can take up to 8 weeks. But, you do not need a 3rd party to register which saves you a lot of money. The process is the same, whether you use a 3rd party or not. It starts with you registering at HMRC and it is always followed by at least one round of additional questions. We have full instructions available in our help centre.  

Once you have the VAT registration, you should appoint EAS as your Tax Agent for easy operations. EAS will then file the reports and make VAT payments on your behalf to HMRC. 

Tax agent is not the same role as tax representative. 

Companies from some countries may require a fiscal representative to be able to register for UK VAT. Fiscal representatives are are jointly and separately liable for the seller's taxes, making the role costly. Countries NOT requiring fiscal representatives are the usual suspects: Switzerland, Norway, the US, Canada, Australia, New Zealand, and all EU countries. 

You can perform the registration yourself, it is really not complicated: https://www.access.service.gov.uk/login/signin/creds

You can also file VAT by using a tax agent such as EAS.