UK drops VAT registration threshold for foreign businesses
The UK has been forced into withdrawing the Value Added Tax registration threshold for non-UK businesses following a recent European Court of Justice case. The change will come into place at the end of 2012.
The case, Schmez C 97/09, went to the ECJ which ruled that the UK must now follow all other European Union member countries in requiring all businesses to account for VAT if offering taxable supplies. Currently the UK VAT registration threshold is GBP 73,000, rising to GBP 77,000 by the end of 2012.
The basis behind this change is that businesses will already be VAT or tax registered in their home countries, so will already be providing supplies within the EU above the UK’s limit. It is therefore not appropriate to assume that there are no other taxable supplies.