Supply and acquisition: goods acquired by and from non-taxable persons
Goods received in the UK by non-registered purchasers
When somebody in the UK who is not registered for VAT buy goods from another Member State, they will normally be charged domestic VAT in the Member State from which the goods are dispatched (but see VATSM3700 for information about distance selling). However, under section 10(3)(a)(ii) of the VAT Act 1994 (see VATSM3315) a UK non-taxable legal person (that is somebody who is not registered for VAT but excluding private individuals), may be subject to acquisition VAT. This arises if the value of goods acquired from other Member States exceeds the UK registration threshold for acquisitions. In that event, the person may be required to register for VAT in the UK on the strength of those purchases alone and account for acquisition VAT in the normal way.
Non-taxable legal persons include public bodies, organisations, institutions, charities and even individuals if they are not acting in a purely personal capacity. Unlike the normal VAT registration threshold which is based on taxable turnover, the acquisition threshold is based on acquisitions made in the UK in a calendar year from 1 January to 31 December. A non-taxable legal person may therefore become liable to register at any time as soon as the threshold is exceeded. For more information about this see the manual covering registration.
Goods purchased from non-registered suppliers in another Member State
Under section 10(3)(c) of the VAT Act 1994 a supply can only create a taxable acquisition in the UK if the supplier is registered for VAT in the Member State of departure of the goods. No acquisition tax is therefore due on goods supplied by an unregistered person in another Member State.