Selling to UK customers from abroad: the £135 VAT rule and UK VAT registration (2026)
If you sell goods from outside the UK to UK consumers in parcels worth £135 or less, UK VAT is charged at checkout, not at the border. On Etsy, eBay and other online marketplaces the marketplace does it. On your own website (for example Shopify), you must register for UK VAT and charge it yourself, and for overseas businesses there is no turnover threshold. Above £135, the buyer pays import VAT and duty on delivery unless you prepay them.
The £135 rule
For consignments worth £135 or less (goods value, excluding transport if shown separately), the overseas seller must charge UK VAT at the point of sale and register for UK VAT. If the sale goes through an online marketplace, the marketplace does this instead. No import VAT is charged at the border.
The £135 limit applies to the value of the whole consignment, not to each item. The value is the price of the goods, without transport or insurance (unless included in the price and not shown separately on the invoice) and without other identifiable taxes and charges. Unless items are sent individually, add their values together. If you change the value so that the consignment goes above £135, you may owe import VAT and customs duty instead and have to adjust the VAT you already accounted for.
The £135 point-of-sale VAT rules do not apply to excise goods or to non-commercial goods such as gifts. The old import VAT exemption for goods worth £15 or less (low value consignment relief) has been removed for goods imported into Great Britain from outside the UK.
UK standard VAT rate is 20%, with a 5% reduced rate and 0% for e.g. most children's clothes and books.
These rules are for Great Britain (England, Scotland and Wales). Northern Ireland has different rules for goods from the EU; see the HMRC guidance in the sources.
Selling on Etsy, eBay or another online marketplace
HMRC treats a website or app as an online marketplace if it sets the terms on which goods are supplied, is involved in authorising or facilitating payment, and is involved in ordering or delivery. A business that only processes payments, only lists or advertises goods, or only redirects customers to other websites is not an online marketplace.
When goods outside the UK in a consignment of £135 or less are sold through an online marketplace to a customer in Great Britain, the marketplace is liable for the UK VAT and charges it at the point of sale. Marketplaces are also liable for VAT on goods of any value that are already in the UK when an overseas business sells them through the marketplace.
Selling from your own shop (Shopify, WooCommerce, your own website)
A sale made directly to the customer, rather than through an online marketplace, follows HMRC's rules for direct sales:
There is no turnover threshold for overseas sellers: you must register for UK VAT, whatever your turnover, if you and your business are based outside the UK and you supply any goods or services to the UK (or expect to in the next 30 days). The £90,000 threshold applies to UK-based businesses. An overseas business that still supplies the UK cannot ask to cancel its registration just because its turnover falls below £88,000.
To charge UK VAT on direct sales of £135 or less, HMRC says the seller must know exactly what the goods are (to apply the correct VAT rate), register for UK VAT (sellers already registered do not re-register), keep records of the goods sold, issue a full paper or digital VAT invoice, and keep full records, including VAT invoices, for 6 years from the date of sale.
Some shipping and checkout services can calculate and collect UK VAT for you, but the registration and the VAT returns stay in your name unless your provider confirms otherwise in writing.
When you may not need to register
If all the goods you sell into the UK are zero-rated (for example most books and children's clothes), you do not need to register for UK VAT and can apply for exemption from registration.
B2B sales to a UK VAT-registered customer who gives their VAT number use the reverse charge, so the seller does not charge VAT.
Sellers do not have to register for UK VAT if they only sell goods that are outside the UK at the point of sale to UK VAT-registered businesses. The seller can check the customer's VAT number with HMRC's online service and note 'reverse charge: customer to account for VAT to HMRC' on the invoice.
Orders over £135, and stock held in the UK
Above £135, normal import VAT and customs duty apply at the border, paid by the buyer (DDU) or prepaid by the seller (DDP).
When the buyer pays on delivery, Royal Mail charges an £8 handling fee and Parcelforce £12 (£25 for goods over £900). Couriers charge their own fees.
Goods already in the UK at the point of sale (for example in a UK fulfilment warehouse): selling them directly, an overseas seller must register and account for UK VAT on sales of any value. Selling them through an online marketplace, the seller still pays import VAT and customs duty when the goods are first imported, the marketplace accounts for the VAT on the sale, and the seller is treated as making a zero-rated supply to the marketplace; sellers who only make such supplies can register or apply for exemption from registration.
UK customs-duty relief on consignments of £135 or less still applies today. The government will remove it (making these parcels subject to tariffs) by October 2028 at the latest; this was accelerated from March 2029 on 23 June 2026. Its consultation response (updated 13 July 2026) says it will also introduce an additional fee on these imports (design and amount not yet announced) and intends to require sellers and online marketplaces without a UK presence to appoint a UK-based fiscal representative.
Worked examples: a US seller, UK buyer
Results from our calculator for parcels sent by post from the US to Great Britain on or after 1 November 2026, free shipping, UK VAT 20%. Silver jewellery has a 2% UK duty rate and cotton T-shirts 12% for US-origin goods (all jewellery rates: jewellery import duty; works of art over £135 pay an effective 5% import VAT: art and antiques guide).
| Order | Buyer pays at checkout | Buyer pays at the door | UK VAT you charge and pay to HMRC | Try it |
|---|---|---|---|---|
| £40 silver jewellery, sold on a marketplace | £48.00 | £0.00 | £0.00 | Open in calculator |
| £40 silver jewellery, sold on your own shop | £48.00 | £0.00 | £8.00 | Open in calculator |
| £200 silver jewellery, own shop, buyer pays on delivery | £200.00 | £52.80 | £0.00 | Open in calculator |
| £200 cotton T-shirts, own shop, buyer pays on delivery | £200.00 | £76.80 | £0.00 | Open in calculator |
At £135 or less no customs duty is charged today, because UK duty relief on low-value consignments still applies (it is due to be removed by October 2028 at the latest). The figures on delivery include Royal Mail's £8 handling fee, which is only partly verified; couriers charge their own fees. Change the product or value in the calculator for your own order.
Checklist for UK orders
- Marketplace sales of £135 or less: the marketplace charges the VAT; you do not add UK VAT yourself.
- Own-shop sales of £135 or less: register for UK VAT before your first UK sale, charge 20% (or the correct rate for the product) at checkout, issue VAT invoices and file UK VAT returns.
- Do not split or change order values to get under £135; HMRC looks at the whole consignment.
- Over £135: choose DDP (you prepay) or DDU (buyer pays duty, VAT and a carrier fee on delivery) and say so in your listing. See DDP vs DAP for Etsy, eBay and Shopify.
- Find your product's UK duty rate with the HS code finder.
- Returns: see international returns and duty refunds for how VAT and duty on returned UK orders can be reclaimed.
Selling to the EU too? The EU equivalent is IOSS, for parcels up to €150: see Do I need an IOSS number? Route guides: China → UK · UK → Ireland · Japan → UK · Korea → UK · Korea → EU · US → UK · EU → UK · Canada → UK · India → UK.
This page is general information, not legal, tax or customs advice. HMRC's guidance is explanatory; whether you must register depends on your circumstances, so check the HMRC pages linked below or ask a UK tax adviser. See the disclaimer.
Sources for this page
- VAT and overseas goods sold directly to customers in the UK, HMRC / GOV.UK. Accessed 26 Oct 2026. Verified
- VAT and overseas goods sold to customers in the UK using online marketplaces, HMRC / GOV.UK. Accessed 26 Oct 2026. Verified
- Register for VAT (when to register, including businesses based outside the UK), HMRC / GOV.UK. Accessed 26 Oct 2026. Verified
- VAT rates, GOV.UK. Accessed 20 Oct 2026. Verified
- Pay a fee (customs charges), Royal Mail. Accessed 5 Nov 2026. Verified
- Pay a customs charge for parcel deliveries, Parcelforce Worldwide. Accessed 20 Oct 2026. Partly verified
- Government backs high street with acceleration of cheap import reforms (23 Jun 2026), GOV.UK. Accessed 11 Nov 2026. Verified
- Reforming the customs treatment of low value imports into the UK (policy paper, 13 Jul 2026), HM Treasury / HMRC. Accessed 29 Oct 2026. Verified
- Reforming the customs treatment of low value imports into the United Kingdom: Consultation response (updated 13 Jul 2026), HM Treasury. Accessed 11 Nov 2026. Verified
Rules change often: the latest change we tracked was on 10 Nov 2026 (US: the 178 China Section 301 product exclusions are extended to 9 January 2027). Alerts send one short email, with the source, only when a rule changes on a route you pick.