UK consignment and call off stock
Non-UK companies with no UK permanent establishment (local company, staff, offices etc.) that are holding goods in the UK may be liable to UK VAT register their company, and report any intra-community supplies and subsequent domestic sales in the UK.
UK VAT stock simplification
There are two regimes in the European Union for VAT compliance on stocks held in another EU member state. The UK’s implementation of these are summarised below:
UK call off stock
If a non-UK seller provides and intra-community supply of goods to a location or warehouse controlled by a single customer, but the title does not change hands, then there should be no need for the non-UK company to VAT register. The goods must be held on a sale or return basis. The buyer will record the intra-community arrival and the domestic sale.
UK consignment stock
If instead the goods are held by a foreign company in a location they control, and the goods are intended for multiple final customers or consignees, then this will require a UK VAT registration by the seller. This is known as Consignment Stock. The seller records the intra-community movement of the goods to the UK, and then the domestic supply to the UK customer.
Note, if the goods are coming from outside the EU, they are an import (as opposed to an intra-community supply), and a registration may be required on this basis alone.Click for free British VAT info