Selling into the UK
With online sales of almost $100 billion in 2020, the UK is the fourth largest market globally and is attractive to any expanding ecommerce business. If you’re looking to sell to UK customers, there are a few things to consider to stay VAT compliant.
Top VAT tips for selling to UK customers
- 1
Understand where you will trigger a VAT obligation
Where your business is required to VAT register will depend on the value of the consignments you intend on importing into the UK. Understanding when VAT should be applied and what rate to charge is essential to your compliance.
- 2
Review your pricing strategy
Throughout the UK the VAT rate is typically set at 20%, this may mean your pricing will need to be considered to make sure your profit margins are protected. Ensure you stay updated via HMRC on the most recent UK VAT rates to remain compliant.
- 3
Apply for an EORI number
As an importer you will need to apply for an EORI number to clear customs processes. At SimplyVAT.com we can help you register for this and set you up so that selling into the UK is easy.
What are your VAT obligations?
If you are selling to UK customers, then it’s important you’re aware of your VAT obligations. Your obligations can vary depending on where your goods are based at the point of sale.
Selling into the UK
Goods outside the UK at Point of Sale (Non-UK businesses)
When selling through your own website to customers in the UK with a consignment value of under £135, you will need to be VAT registered from your first sale. All sales with a consignment value of less than £135 will be subject to VAT at the point of sale from the seller.
When selling on a marketplace to UK consumers in consignments of less than £135, and the goods are outside of the UK at the time of the sale, the marketplace will be responsible for charging and collecting the UK VAT to the customer on your behalf.
If the consignment value is over £135, you can choose who the importer of record for the sale is: yourself, or the customer. If you are the importer of record then you must be VAT registered, charge VAT at the point of sale, pay import VAT and reclaim it on your VAT return.
As a seller, you must charge the UK VAT rate applicable to your products on all sales made to UK customers.
Selling within the UK
Goods inside the UK at Point of Sale (Non-UK Businesses)
If you have goods within the UK to sell onwards to customers, you have created a taxable supply and must be VAT registered. You must charge VAT on all sales made to UK customers. Any import VAT paid can be reclaimed on your VAT return (excluding those businesses that are under the Flat Rate Scheme).
As a seller, you must charge the UK VAT rate applicable to your products on all sales made to UK customers.
Providing peace of mind to 1000s of sellers
Find out how UK trade has changed with our Brexit eBook
Trade between the UK and the EU has changed dramatically since January 2021. In 2020, we ran a series of Brexit Bootcamp webinars, we compiled this information into a handy downloadable eBook for you to refer to. If you want to know how you can continue to trade compliantly, get yourself a copy of our Brexit Bootcamp eBook.
Download here »Get UK VAT Registered
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