Goodwille Warns: Overseas Businesses Are Misreading the UK VAT Threshold and Registering Far Too Late

Goodwille, the UK market entry and finance specialist, warns that overseas businesses trading in the UK often have no VAT registration threshold at all, and are registering months too late.

London, Greater London , Sept. 11, 2026 (GLOBE NEWSWIRE) -- Goodwille, one of the UK's leading specialists in market entry and finance services for international businesses, is warning that a widely held assumption about UK VAT is leaving overseas companies exposed to backdated tax bills, interest and penalties.

Most overseas businesses trading in the UK believe they can wait until their sales reach £90,000 before they need to register for VAT. For a large number of them, that threshold does not apply at all.

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The threshold that does not apply

The £90,000 VAT registration threshold applies to businesses that are established in the UK. It is tested on a rolling twelve-month basis, with a separate forward-looking test that requires registration where taxable turnover is expected to exceed £90,000 in the next 30 days alone.

A business without a UK establishment is treated differently. HMRC classifies it as a non-established taxable person, or NETP. Broadly, this covers a business that is not normally resident in the UK, has no UK establishment, and, in the case of a company, is not incorporated in the UK in a way that allows it to make or receive supplies from that address.

For a non-established taxable person, there is no registration threshold at all. Registration is required from the first taxable supply made in the UK, regardless of its value. A single low-value sale to a UK customer can create the obligation, and HMRC must be notified within 30 days. This has been the position since December 2012.

The picture tightened further after Brexit. The EU distance selling thresholds that previously allowed overseas sellers to defer UK registration until sales reached a set level no longer apply, and businesses that have not revisited their position since leaving those rules behind are among the most exposed.

Why registering late is so expensive

Registering late does not delay the liability. It only delays its discovery. Where HMRC determines that registration should have taken place earlier, VAT is due from that earlier effective date, together with interest and, potentially, penalties.

The commercial difficulty is that the VAT was never charged in the first place. An overseas seller that has invoiced UK customers without VAT for eighteen months is rarely in a position to go back and collect it. The liability comes straight out of margin, and in some cases out of a UK operation that was only just becoming profitable.

HMRC has also sharpened its focus in this area in recent years, particularly on overseas businesses holding stock in UK fulfilment warehouses and selling through online marketplaces, where compliance was historically weak.

Goodwille can help

Goodwille's specialist UK tax support covers VAT registration, ongoing VAT returns and HMRC correspondence for international businesses, delivered by finance teams across its London and Warwick offices.

Dom Morris, Head of Finance at Goodwille, comments:

"The £90,000 figure is repeated so often that overseas businesses assume it applies to them, and very often it does not. We would always rather have this conversation before the first UK sale than eighteen months afterwards, when the VAT is already due and there is nobody left to charge it to."

Being established in the UK is not the same as being incorporated here

The question of whether a business is UK-established is more nuanced than most assume, and it is the point at which VAT stops being an administrative task and becomes a structuring decision.

Incorporating a UK company does not automatically settle it. HMRC looks for a genuine business establishment or fixed establishment in the UK, meaning a real place of business with the human and technical resources needed to make or receive supplies. A registered office address with nothing behind it is unlikely to be sufficient on its own.

For businesses setting up and scaling a UK operation, this matters at the point the structure is chosen rather than afterwards. Whether a business sells into the UK directly, registers a branch or incorporates a subsidiary shapes its VAT position from day one, alongside its corporation tax, payroll and reporting obligations.

"Businesses tend to treat VAT registration as a form to be completed once trading starts. It is better understood as a consequence of how the UK operation has been set up. Get the structure right and the VAT position follows from it. Get it wrong and you are correcting it retrospectively, which is always more expensive and far more disruptive."

Compliance does not stop at registration

Once registered, a business must keep digital records and submit its VAT returns through compatible software under Making Tax Digital. That applies to overseas-owned businesses in exactly the same way it applies to UK ones, and it is a common second stumbling block for companies whose accounting systems, currency and finance team all sit in another country.

Goodwille provides day-to-day finance and accounting support for international businesses operating in the UK, covering bookkeeping, VAT and HMRC submissions, management reporting and year-end accounts. Many of the team are qualified chartered accountants who act as Financial Controllers for their clients, giving overseas head offices a single point of contact for the UK numbers.

The company also supports businesses through the earlier decisions that shape those obligations, from choosing between a branch and a subsidiary to HMRC registrations and operational set-up. Its work spans more than 3,000 companies that have already made the move into the UK market.

For media enquiries, please contact: James Service, hello@goodwille.com and 020 7795 8100

About Goodwille Founded over 25 years ago, Goodwille is a leading UK market entry and business services specialist supporting international businesses in establishing and scaling their UK presence. With 52 specialists across corporate governance, finance, HR, payroll, and virtual office services, the company has supported more than 3,000 businesses from across Europe and beyond. Goodwille is a registered Authorised Corporate Service Provider (ACSP) with Companies House.

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About Dom Morris Dom Morris is Head of Finance at Goodwille, responsible for the finance teams across the company's London and Warwick offices alongside his own portfolio of clients. He specialises in VAT and HMRC compliance, financial reporting and Financial Controller services for international businesses entering and scaling in the UK market.

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Media Contact

Goodwille

20 Red Lion St, London WC1R 4PS, United Kingdom

james.service@goodwille.com

https://goodwille.com/

Disclaimer: This press release is provided for general informational purposes only and does not constitute tax, legal, or accounting advice. UK VAT obligations depend on the specific facts and circumstances of each business, and applicable laws and HMRC guidance may change over time. Businesses should seek advice from a qualified tax or legal professional regarding their individual situation.