Tax representation in UK

Tax Representation in UK - 7/28

Brexit has led to the United Kingdom being considered as a third country since 1 January 2021. Transactions on goods carried out between the United Kingdom and France or other European countries constitute imports and exports and the supply of services is carried out to or from a third country. Tax representation is the solution !

VAT registration:

A Tax representation is essential if:

The company’s distance sales exceed the UK threshold (GBP 70,000)
The company makes taxable supplies or services in the territory of the United Kingdom.
In the short term, the company will carry out taxable transactions in the United Kingdom

Distance sales (especially of excise goods) are also transactions requiring registration for English VAT. There is no registration threshold for these deliveries.

To manage this registration and the related declarations, you will need to appoint a tax representative. He will be in charge of the various monthly formalities (VAT declaration and payment of taxes).

From the moment the registration is effective, you will have to mention VAT on all your invoices. You will also be able to recover any VAT that may be charged to you elsewhere.

It is important to anticipate registration because the average time it takes to obtain a VAT number is 8 weeks.

Non-Established Taxable Person (NETP):

Overseas businesses that do not have an establishment in the UK, known as an Established Taxable Person (NETP) may also need to appoint tax representatives.

If your business is a NETP, you can appoint a tax representative to keep your customer’s VAT statements and accounts up to date.

They are jointly and severally liable for any VAT-related debts incurred by your business.

Of course, a NETP is required to provide all the information necessary to fulfill its obligations.

In addition to dealing with the legal obligation, a tax representative can help you on many subjects :

It will give you access to practical tax knowledge and experience
It will ensure that the company’s VAT records are transparent and clear
It will eliminate the initial payment of VAT upon importation as Sales VAT is balance on your VAT account, reducing your cash-flow burden

The Tax Representative will take care of processing the VAT registration, as well as filing your VAT returns with HMRC.

The role of the tax representative in the UK

In general, the Tax Representative is responsible for the proper calculation and reporting of VAT and serves as a point of contact for local tax authorities in case of questions or audits. If your business has unpaid or undeclared VAT, it will be held jointly liable for the debt.

When the VAT threshold is reached, your tax representative will take care of everything on your behalf.

Similarly, it will also handle administrative records and documents and notify you of any regulatory changes that may affect your business.

The tax representative is also responsible to the local tax authorities in order to facilitate collaboration between tax agents and your company, when:

Verification that your business is properly registered with the local tax authority
Compliance with standards for invoicing, VAT processing, exchange rates, etc.
Maintaining accounting records that meet strict local requirements and are easily accessible to tax authorities
Preparation and correct submission of all VAT and related files
Professional Head of Investigations of the Office of VAT and Tax Audits

A tax representative is a tax-registered company that will act on your behalf by taking care of your administrative obligations, handling VAT affairs while dealing with the tax authorities. In particular, he will be on the front line during investigations by the VAT Office or during tax audits.

Don’t hesitate, contact us!