UK VAT Registration for US Companies

Updated October 2026

US companies selling goods or services in the UK must register for VAT with HMRC before their first sale. There is no threshold exemption for non-resident sellers. HMRC classifies every US business without a UK establishment as a Non-Established Taxable Person (NETP), which means the standard £90,000 registration threshold does not apply. Registration typically takes 20 to 40 working days through HMRC, with overseas applications often stretching to 8 to 12 weeks.

TL;DR

• US companies must register for UK VAT from their first taxable UK supply. The £90,000 threshold is for UK-established businesses only.

• HMRC classifies US sellers as Non-Established Taxable Persons (NETPs) under Schedule 1A of the VAT Act 1994.

• Registration takes 20 to 40 working days on average, with complex overseas cases taking up to 12 weeks (HMRC, October 2026).

• The standard UK VAT rate is 20%. Quarterly MTD-compatible returns are mandatory.

• A Merchant of Record like CRSSBRDR bypasses the entire registration queue. 7 to 10 business days to first sale.

CRSSBRDR™ is the only MoR built by a licensed accountant and a founding TikTok Shop Partner agency. We get US and EU brands live on TikTok Shop UK in 7 to 10 business days. £100M+ in ecommerce sales driven. Compliance built in, growth switched on.

Why do US companies need to register for UK VAT?

US companies need to register for UK VAT because HMRC treats any business without a UK establishment as a Non-Established Taxable Person. Under Schedule 1A of the VAT Act 1994, NETPs must register from their very first taxable supply in the UK, regardless of turnover.

Three triggers create a UK VAT obligation for US companies:

1. Selling goods located in the UK. If your inventory is in a UK warehouse, fulfilment centre, or 3PL facility, you are making taxable supplies on UK soil.

2. Importing goods into the UK for sale. Shipping products from the US to UK customers creates import VAT liability and a requirement to register.

3. Selling digital services to UK consumers. SaaS, apps, e-books, and online courses sold B2C to UK buyers trigger immediate registration with no minimum revenue.

The £90,000 VAT registration threshold that UK-established businesses benefit from does not apply to NETPs. HMRC confirmed this position in VAT Notice 700/1 (updated 2026): overseas businesses making taxable supplies in the UK must register immediately.

Failing to register does not pause your liability. HMRC can backdate your registration to the date of your first UK supply and assess back-VAT, late registration penalties of up to 15% of the VAT owed, and daily interest.

What documents do US companies need for UK VAT registration?

US companies need the following documents to complete a UK VAT registration application with HMRC:

• Certificate of incorporation (or equivalent state filing)

• EIN confirmation letter from the IRS

• Company legal and trading name

• Description of business activities and the goods or services sold

• Expected UK turnover for the next 12 months

• Director details: full name, date of birth, address, email, phone number

• Passport copy and two proofs of address for each director

• Ownership structure: details of all shareholders holding more than 25%

• UK correspondence address (HMRC will post your VAT certificate here)

Directors and ultimate beneficial owners with more than 25% ownership will need to pass HMRC's Anti-Money Laundering (AML) and Know Your Customer (KYC) checks. For US directors without UK documentation, HMRC frequently requests additional supporting evidence, which extends the processing timeline.

How long does UK VAT registration take for a US company?

UK VAT registration for a US company typically takes 20 to 40 working days, though overseas applications with complex structures can take up to 12 weeks.

Here is the realistic timeline breakdown:

HMRC's published target is to process VAT registrations within 40 working days (HMRC, 2026). Applications from non-resident companies with overseas directors routinely trigger additional verification, extending the timeline.

Common causes of delay:

• Incomplete documentation (especially proof of address for non-UK directors)

• HMRC requesting evidence of trading intention

• Multiple beneficial owners requiring separate KYC checks

• Incorrect or missing UK correspondence address

How much does UK VAT registration cost?

UK VAT registration with HMRC is free. There is no government fee to apply.

The costs US companies face are professional fees for the application and ongoing compliance:

These costs are on top of entity setup, EORI registration, and Importer of Record fees. The total year-one cost of doing this yourself is typically £3,000 to £8,000 before accounting for the 8 to 12 weeks of lost sales time.

What is the UK VAT rate US companies must charge?

The standard UK VAT rate is 20%, applied to most goods and services. Reduced rates exist for specific categories:

• 20% standard rate: most goods, electronics, beauty, fashion, homeware

• 5% reduced rate: domestic fuel, children's car seats, sanitary products

• 0% zero rate: most food, children's clothing, books, newspapers

US companies selling consumer goods on platforms like TikTok Shop UK will almost always charge the 20% standard rate. The rate is applied at the point of sale and remitted to HMRC on quarterly VAT returns.

For goods shipped from the US valued at £135 or less, TikTok Shop and other online marketplaces collect and remit VAT on behalf of the seller under UK marketplace VAT rules (HMRC VAT Notice 725, updated 2026). For goods above £135, or for sales through your own website, the seller is responsible for charging, collecting, and remitting VAT.

What is the difference between the £90,000 threshold and the NETP rule?

The £90,000 threshold is exclusively for UK-established businesses. US companies are classified as NETPs and have a zero threshold.

Here is the comparison:

HMRC defines "establishment" narrowly. A UK registered address, a UK incorporation, or a UK fulfilment warehouse alone does not create an establishment. HMRC looks for where essential management decisions are made and where the business has permanent human and technical resources to make or receive taxable supplies (HMRC VATREG37150).

This means most US companies selling into the UK through 3PL fulfilment or TikTok Shop remain NETPs even if they incorporate a UK Ltd.

What are the ongoing UK VAT obligations for US companies?

Once registered, US companies must meet four ongoing obligations:

1. Quarterly VAT returns via Making Tax Digital (MTD). HMRC requires all VAT-registered businesses to file digitally through MTD-compatible software. Paper returns are not accepted. Returns are due one month and seven days after the end of each quarter.

2. Accurate VAT invoicing. Every sale to a VAT-registered UK customer requires a valid VAT invoice showing your VAT number, the VAT rate, and the VAT amount. B2C sales require simplified invoices for transactions under £250.

3. Record-keeping for six years. HMRC requires all VAT records, including invoices, receipts, customs declarations, and import documentation, to be retained for at least six years.

4. Import VAT via Postponed VAT Accounting (PVA). Since January 2021, businesses importing goods into the UK can use PVA to account for import VAT on their VAT return rather than paying it at the border. This eliminates the cash flow impact of 20% import VAT on every shipment (HMRC, Postponed VAT Accounting).

What happens if a US company does not register for UK VAT?

HMRC can take three actions against US companies that fail to register:

1. Backdated registration. HMRC registers you from the date of your first UK taxable supply, not the date you applied. All sales since that date are treated as VAT-inclusive, meaning you owe 20% of every pound collected.

2. Late registration penalty. Up to 15% of the VAT owed for the period between when you should have registered and when you actually did. The penalty scales with the length of delay.

3. Interest. HMRC charges daily interest on all outstanding VAT from the date it was due.

Beyond HMRC, failure to register blocks your access to UK selling platforms. TikTok Shop UK requires a valid UK VAT number to open a seller account. Amazon UK requires VAT registration for FBA sellers storing goods in the UK. Without a VAT number, your listing cannot go live.

Can a US company use a Merchant of Record instead of registering for VAT?

Yes. A Merchant of Record (MoR) is a UK-registered entity that acts as the legal seller on your transactions. The MoR holds its own UK VAT registration, EORI number, and Importer of Record status. Your brand sells through the MoR's infrastructure without needing its own UK entity or VAT number.

This is not a loophole. It is how cross-border commerce is structured across the EU and UK. The MoR collects VAT, files returns, handles customs, and remits net revenue to you.

The comparison:

For US brands entering the UK market, an MoR eliminates 8 to 12 weeks of HMRC queue time and removes the need to navigate VAT registration, EORI, and IoR setup independently.

FAQ

Do US companies get the £90,000 VAT threshold? No. The £90,000 threshold applies only to UK-established businesses. US companies are classified as NETPs and must register from their first taxable UK supply under Schedule 1A of the VAT Act 1994.

Can I register for UK VAT without a UK entity? Yes. HMRC allows overseas businesses to register for UK VAT without a UK company. You register as a Non-Established Taxable Person and provide a UK correspondence address for HMRC communications.

Do I need a UK bank account for VAT registration? No. HMRC does not require a UK bank account for VAT registration. However, TikTok Shop UK does require a UK bank account for seller payouts, which is a separate requirement from VAT.

What is Postponed VAT Accounting? PVA allows you to account for import VAT on your quarterly VAT return instead of paying it at the border. This eliminates the cash flow impact of 20% import VAT on every shipment entering the UK.

Can TikTok Shop handle VAT so I do not need to register? TikTok Shop collects VAT on orders under £135 under UK marketplace rules. But this does not remove your obligation to register. You still need a VAT number to open a seller account and to handle orders above £135.

How do I check if my VAT registration is active? Use the HMRC online service at GOV.UK to verify a UK VAT number. Your VAT certificate will arrive by post to your UK correspondence address within 30 working days of approval.

What MTD software do I need for UK VAT returns? Any HMRC-recognised MTD-compatible software. Popular options include Xero, QuickBooks, FreeAgent, and Sage. Your accountant or MoR provider will typically handle this.

Is US sales tax the same as UK VAT? No. US sales tax is a point-of-sale tax that varies by state. UK VAT is a transaction tax applied at every stage of the supply chain. Your US sales tax registration has no standing with HMRC.

CRSSBRDR™ is the only Merchant of Record built by a licensed accountant and a founding TikTok Shop Partner agency. Get started with CRSSBRDR.