1. What is VAT (Value Added Tax)?

The full name of VAT is Value Added Tax , which is an after-sales value-added tax commonly used in EU countries. That is, the profit tax on the sale of goods. Usually, foreign goods entering the UK need to pay import tax; when the goods are sold, the merchant can refund the imported value-added tax paid, and then pay the corresponding sales tax according to the sales.

2. Under what circumstances do you need to apply for a VAT tax number?

1. British sellers sell in the UK, such as the annual turnover of the business exceeds 85,000 pounds with value-added tax;

2. The overseas seller sells in the UK, and you store the inventory in the UK and deliver the goods from the UK. That is what we often call FBA or overseas warehouse ;

3. Exceeding UK remote sales: Sales to UK customers exceed £ 70,000 per year .

3. How to declare the VAT tax number?

There are two formal ways to declare VAT :

① Zero declaration: During a declaration period, if the seller has not sold goods in the country that needs to declare, he can choose zero declaration.

②Normal declaration: During a declaration period, if the seller has sales in a country that needs to declare, then choose normal declaration.

4. What are the consequences if the UK VAT is not registered?

In the UK, if the seller does not have a VAT tax ID number on Amazon and sends FBA again , the store will be closed. For unregistered, undeclared, and unpaid VAT violations, the following penalties are imposed:

1 ) Unable to enjoy import value-added tax refund;

2 ) The goods are seized by the customs and cannot be cleared;

3 ) Amazon accounts cannot conduct any sales;

4 ) Pay taxes and interest and face huge fines.

5. What are the consequences of late payment of VAT tax number?

In response to failure to pay taxes on time, the British Taxation Bureau also proposed corresponding step-by-step penalty rules:

1. 15 days overdue , full payment within 1-15 days, no penalty will be incurred ;

2. If you agree to pay in full within 16-30 days after the due date, you will be fined 2% of the tax owed on the 15th day ;

3. After the end of the 31st day, 2% of the tax owed on the 30th day will be added as a fine, and a daily fine of 4% annual interest rate will be generated at the same time . The fine will be accumulated on a daily basis until the tax bureau receives the full amount of tax.

In addition, the British tax office will also charge a late payment fee, and the interest on overdue payments is calculated at the Bank of England base rate plus 2.5% .

In order to help companies adapt to the changes in the new rules, the British tax office stated that if the company pays the tax office late once during January-December 2023 and pays it within 30 days of the due date , there will be no penalty .