Does a UK Ltd Need VAT Registration? £90,000 Threshold, NETP Status and Overseas Clients

A UK limited company must register for VAT once it makes taxable supplies in the UK above the legal trigger, and the trigger depends on where the company is established. A UK-established company registers when its UK taxable turnover passes £90,000 in any rolling 12 months, or is expected to pass £90,000 in the next 30 days alone. A company with no UK establishment is a non-established taxable person (NETP) and registers from its first UK taxable supply, with no threshold at all.

For a founder in Canada, the EU, Ukraine or the US who runs a UK Ltd remotely, two facts usually settle the question. HMRC's VAT Registration Manual (VATREG37150) states that a UK incorporation and a registered, serviced or virtual office do not by themselves create a UK establishment. And business-to-business services sold to clients outside the UK are, under the general rule, supplied in the client's country, so they fall outside the scope of UK VAT and do not count towards the £90,000.

Verified 2 October 2026 against the Value Added Tax Act 1994, HMRC VAT Notice 700/1 and its supplement, VAT Notice 741A and the VAT Registration Manual (VATREG37150). The full list is under Sources at the end.

Running a UK Ltd from another country? We sort your sales by place of supply, test whether the company is UK-established or a NETP, and file the HMRC registration when it falls due. UK VAT services → · UK accounting for non-residents

Decision table: does your UK Ltd need to register for VAT?

How the £90,000 VAT threshold works for a UK-established company

The threshold applies only to a UK-established company. Schedule 1, paragraph 1(1) of the VAT Act 1994 sets two tests, and either one creates the duty to register.

1. The 12-month look-back. At the end of every month, add up UK taxable supplies for the 12 months ending that day. Above £90,000, the company becomes liable. HMRC must be told within 30 days of that month-end, and registration takes effect from the end of the following month or an earlier agreed date (Sch 1 para 5).
2. The 30-day look-forward. If there are reasonable grounds to expect more than £90,000 of UK taxable supplies in the next 30 days alone, the company is liable at once. HMRC must be told before those 30 days end, and registration runs from the start of the period (Sch 1 para 6). One large UK contract can trigger this test on its own.

Per VAT Notice 700/1 §3.4, the total includes every taxable supply made in the UK, zero-rated ones too. Exempt supplies, sales of capital assets (Sch 1 para 1(7)) and supplies made outside the UK stay out.

Three further rules matter in practice:

• A one-off spike. If HMRC is satisfied that taxable supplies in the next 12 months will stay at or below £88,000, passing £90,000 on the look-back does not create the liability (Sch 1 para 1(3)). £88,000 is also the deregistration threshold (Sch 1 para 4).
• History counts after a move. Supplies are counted in the 12-month total whether or not the company was UK-established when it made them (Sch 1 para 1(2A)). If the director relocates to London mid-year, earlier UK sales stay in the look-back.
• The figure. £85,000 until 31 March 2024, £90,000 since 1 April 2024. HMRC's Notice 700/1 supplement, updated on 5 August 2026, lists £90,000 for 1 April 2026 to 31 March 2027.

UK-established or NETP: where a remotely run UK Ltd stands

A person is UK-established if it has a business establishment, or some other fixed establishment, in the United Kingdom in relation to its business (Sch 1 para 1(10)). A person without one is a non-established taxable person, registered under Schedule 1A.

VAT Notice 700/1 §9.2 gives HMRC's two tests: the place where essential management decisions are made and central administration is carried out is in the UK; or the business has a permanent physical presence in the UK with the human and technical resources to make or receive taxable supplies. HMRC would normally treat a UK-incorporated company as established if it can make or receive business supplies at its registered business address, and a registered, serviced or virtual office alone is not enough.

The VAT Registration Manual, page VATREG37150 (establishment wording in force since 29 April 2024), is more direct: "a third-party UK address or company incorporated in the UK will not by itself be sufficient to create a UK establishment", and "A registered, serviced or virtual office address or mail forwarding service will not create a UK establishment." Officers look at how far the management and running of the business takes place in the UK.

A common set-up: the sole director lives in Toronto, Warsaw, Kyiv or Austin and signs contracts there, the registered office is a formation agent's London address, and nobody works for the company in the UK. On HMRC's published tests, that company may well be a NETP. Many guides quote only the Notice 700/1 line that a UK-incorporated company is normally established. HMRC's manual adds the condition that matters for a remote founder: incorporation alone is not enough, and officers look at where the business is managed and run.

What NETP status changes:

• No threshold. Since 1 December 2012 the threshold has been unavailable to NETPs (Notice 700/1 supplement §2.1). Liability starts with the first UK taxable supply, or when one is expected within 30 days (Sch 1A para 1).
• A short clock. HMRC must be notified within 30 days of the day the liability arises, and registration takes effect from that day (Sch 1A para 5).
• Two exceptions. A NETP whose UK supplies are all services taxed under the reverse charge by UK VAT-registered business customers is neither liable nor entitled to register (VATREG37200; Notice 741A §2.6). A NETP whose UK sales are all zero-rated can ask HMRC for exemption from registration (Sch 1A para 13; Notice 700/1 §9.3).

A director running the business from the UK, UK staff or a working UK office move the company towards UK establishment, and the VAT position moves with them.

B2B services to clients outside the UK: outside the scope of UK VAT

Section 7A(2)(a) of the VAT Act 1994 places a supply of services to a relevant business person in the country where the customer belongs. Section 7A(4) defines that person as one who carries on a business and does not receive the services wholly for private purposes.

A UK Ltd invoicing a company in Germany, Canada or Ukraine for consulting, development or design therefore supplies in the client's country. VAT Notice 741A §2.1 calls such supplies "outside the scope" of UK VAT. They are not UK taxable supplies, so they stay out of the £90,000 and create no registration duty, for a UK-established company and a NETP alike.

Keep the evidence: Notice 741A §6.3 asks for commercial proof that the customer is in business and belongs outside the UK, and an EU customer's VAT number is the best evidence.

On the client's side, Articles 44 and 196 of Council Directive 2006/112/EC generally make an EU business customer account for the VAT itself under the reverse charge when the supplier is not established in its member state. Customers in Canada, the US or Ukraine apply their own rules to imported services.

Two limits: Schedule 4A overrides the general rule for some services even when the customer is a business (land in the UK, admission to UK events, hire of transport), and services sold to private individuals are supplied, by default, where the supplier belongs (s.7A(2)(b)), again with many Schedule 4A exceptions; check each type of service. And this guide covers services; goods sold into the UK follow separate VAT and import rules.

Invoicing without a VAT number: what a UK Ltd must show

An unregistered UK company issues ordinary invoices with no VAT and no VAT number, which is the correct form while there is no duty to register. GOV.UK lists the contents: a unique invoice number, the company name, address and contact details, the customer's name and address, a description of the work, the supply date, the invoice date, the amounts and the total. A limited company uses its full name as shown on the certificate of incorporation.

Company law adds trading disclosures: the registered name on invoices and other demands for payment (SI 2015/17, reg 24), and the part of the UK of registration, the company number and the registered office address on business letters, order forms and the website (reg 25).

Two lines to hold:

• No VAT on an invoice before registration. An invoice showing VAT from a person who is not VAT-registered is an unauthorised issue, and HMRC can charge a penalty (Finance Act 2008, Sch 41 para 2; HMRC manual CH91350).
• While the VAT number is pending. GOV.UK says you cannot include VAT on invoices until the number arrives; you can raise prices to cover the VAT you will owe, then reissue VAT invoices once the number comes through.

Voluntary VAT registration: when it pays off

Two routes in Schedule 1:

• Paragraph 9. A company that makes UK taxable supplies, or intends to, may ask to be registered from the request date or an earlier agreed date.
• Paragraph 10. A company whose supplies are all made outside the UK, but would be taxable if made in the UK, may register if it has a UK business establishment or its usual place of residence is in the UK. For a company, that is where it is legally constituted (para 10(4)(b)). The company must not make, or intend to make, UK taxable supplies (para 10(3)(b)), and HMRC expects it to bear recoverable UK VAT on purchases or imports (Notice 700/1 §2.9; VATREG23250).

It pays when the company bears meaningful UK VAT on costs or UK business clients expect a VAT-registered supplier. The price is quarterly VAT returns, digital records and accounting time.

Monthly UK VAT check for a UK Ltd run from abroad

1. Total UK taxable supplies for the last 12 months, zero-rated included, exempt and outside-scope sales left out. Compare with £90,000.
2. Forecast the next 30 days. One UK contract above £90,000 triggers registration on its own.
3. Tag every invoice by place of supply: UK customer, business abroad, private individual.
4. File customer evidence: EU VAT numbers, registry extracts, contracts showing business status and location.
5. Re-test establishment when facts change: a director moving to the UK, a first UK hire, a UK office in use.
6. Watch the first UK sale. For a NETP it starts a 30-day notification clock.

GOV.UK states that a business registering late must pay VAT on sales made since the date it should have registered, and may pay a penalty depending on the amount owed and the delay.

FAQ

UK VAT for founders abroad, handled end to end

INNOVA works with founders running UK companies from Canada, the EU, Ukraine and the US: place-of-supply mapping, the establishment test, HMRC registration when it is due or when it pays, then bookkeeping and VAT returns. In the United Kingdom, company formation and accounting are delivered together with partner firms supervised under the Money Laundering Regulations 2017.

UK VAT registration and returns → · UK company formation · UK business banking · Contact us

Related: EU OSS and IOSS for non-EU sellers, UK Ltd vs LLP, Companies House identity checks for foreign directors.

Sources (checked 2 October 2026):

• Value Added Tax Act 1994, ss.3, 4, 7A, Schedules 1 and 1A — legislation.gov.uk/ukpga/1994/23
• HMRC, VAT Notice 700/1 and its supplement (updated 5 August 2026) — gov.uk/government/publications/vat-notice-7001-should-i-be-registered-for-vat
• HMRC, VAT Registration Manual VATREG37150 (establishment text revised 29 April 2024) — gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg37150
• HMRC, VAT Notice 741A: Place of supply of services — gov.uk/guidance/vat-place-of-supply-of-services-notice-741a
• GOV.UK, Register for VAT — gov.uk/register-for-vat
• GOV.UK, Invoices: what they must include — gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include
• HMRC Compliance Handbook CH91350 — gov.uk/hmrc-internal-manuals/compliance-handbook/ch91350
• Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015, SI 2015/17 — legislation.gov.uk/uksi/2015/17
• Council Directive 2006/112/EC, Articles 44 and 196 — eur-lex.europa.eu

For information only; checked against the legislation and HMRC guidance listed above on 2 October 2026. Whether a company is UK-established is a question of fact, and HMRC decides each registration on the evidence.