Most Manx businesses with UK customers assume one of two things: either nothing changes (mostly wrong), or everything changes (also mostly wrong). The reality sits between them, and the threshold that triggers a real change depends more on how you do business than how much of it you do.
The question we hear most often is: "I sell to UK customers - do I need to register for UK VAT?" The honest answer is: probably not, until you do. Here's how to tell.
VAT - the threshold most people misunderstand.
The UK VAT registration threshold (£90,000 of taxable supplies in any rolling 12-month period) does apply to Manx businesses selling into the UK - but only for supplies that are deemed UK-supplied. For most B2B services to a UK business customer, the supply is treated as occurring in the UK under the general rule, and the UK customer accounts for VAT via the reverse charge. The Manx supplier doesn't register.
For B2C supplies, the picture is different. Goods sold to UK consumers (typically via online platforms) usually do bring you within the UK system - either directly or via the platform's deemed-supplier rules. Digital services to UK consumers used to fall under VAT OSS; you now register under the UK's own post-2021 rules instead.
Place of supply: where it gets nuanced.
The general place-of-supply rules sit alongside specific rules for property, transport, hospitality, and events. If you provide services tied to a specific UK location - construction work on a UK site, a conference held in the UK, hotel accommodation - the place of supply is the UK, regardless of how the customer relationship is structured.
Permanent establishment: the question that matters more than VAT.
If a Manx company has a permanent establishment in the UK - typically an office, employees, or a fixed place of business - it falls into the UK corporation tax net for the profits attributable to that establishment. This is the threshold worth understanding well before you trigger it. Setting up a small UK presence is straightforward, but the tax position behind it is a decision worth modelling first.
When to come and talk to us early.
Most cross-border tax questions don't need urgent action. But they do benefit from a conversation before they need urgent action. Specifically:
- You're considering hiring your first UK-based employee
- A platform or UK customer has asked you to register for UK VAT
- You've started selling regularly to UK consumers above modest volumes
- You're planning a UK office, even informally
If you're at the threshold of any of the above, the first conversation is free.