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HMRC to ask VAT-registered businesses to prove UK establishment


Published: 25 Sep 2023 Update History

Businesses registered for VAT at a high-volume address will be asked by HMRC to prove they are established in the UK.

Online marketplaces have been liable for the output VAT from sales on their platforms by overseas traders since January 2021. HMRC believes that some non-established taxable persons (NETPs) have incorporated in the UK and provided UK address details to marketplaces to avoid these rules.  

Where this happens, the NETP can fail to declare the VAT without the marketplace becoming liable. This gives the NETP a competitive advantage compared to genuine UK businesses. 

In recent years, HMRC has seen an increase in the use of “high-volume addresses”. A high-volume address is where a single UK address is listed as the principal place of business for many VAT-registered businesses. It has been reported that in some cases, more than 10,000 businesses have been registered at a single UK address. 

To combat this, HMRC is now writing to VAT-registered businesses that are registered at high-volume addresses to ask for evidence proving the business is established in the UK for VAT purposes. If the business does not respond, HMRC will consider the business to be non-established for VAT purposes. 

Genuine UK businesses that receive a letter will need to send evidence to HMRC to show they are established in the UK. Details of what evidence can be provided will be included in the letter.  

Businesses that receive this letter can respond directly to HMRC, or ask an authorised agent to do so on their behalf. Agents can send HMRC the completed form from their agent email address included on the VAT registration application for that business. Where the agent’s details were not included on the VAT registration application, the business will need to send HMRC a completed 64-8 form

Businesses that are not established in the UK for VAT purposes do not need to respond to the letter. More details on the rules of establishment for VAT purposes can be found in VAT Notice 741A

Further reading: 

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