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HMRC internal manual

VAT Registration

Registration in respect of distance selling from other Member States: compulsory registration

A person may become liable to be registered in respect of distance sales under:

  • Schedule 2, paragraph 1(1) (the backward look)
  • Schedule 2, paragraph 1(2) (the exercise of an option), or
  • Schedule 2, paragraph 1(3) (the supply is of excisable goods).

Backward look

Schedule 2, paragraph 1(1) provides that a person becomes liable to be registered under this schedule on any day if, in the period beginning with 1 January of the year in which that day falls, that person has made relevant supplies whose value exceeds [the distance selling threshold].

Traders may therefore be liable to register at any time during the calendar year, as soon as the threshold is exceeded, but their liability calculation starts afresh at 1 January each year. Unlike Schedules 1 and 3, the person is liable to register on the day the threshold is exceeded rather than at the month end.


Schedule 2, paragraph 1(2) provides that a person becomes liable to be registered under this schedule at any time if:

  • they have exercised an option in the Member State of origin to treat relevant supplies as being made in the UK, and
  • they make such a supply.

Excisable goods

Schedule 2, paragraph 1(3) provides that a person becomes liable to register under this schedule where the person makes any supply of excisable goods that would otherwise satisfy the ‘relevant supply’ conditions at VATREG41150. There is no threshold for excisable goods.