| UK status | third country, outside the EU customs union since 1 January 2021 |
| Standard VAT rate | 20 % |
| Registration threshold | £90,000 for UK businesses; businesses not established in the UK register from their first taxable sale |
| Consignments up to £135 | the seller charges UK VAT at the point of sale; B2B with a VAT number by reverse charge |
| Over £135 | import VAT and duty under the normal rules |
| B2B services | supplied where the customer belongs; the British customer accounts by reverse charge |
| Goods from the UK into the EU | import VAT and a customs declaration; on distance sales a €2 handling fee per item category since 1 November 2026 |
The UK is a third country: what that means for VAT
Until the end of 2020, shipping from Rotterdam to Manchester was an intra-EU supply like any other. Since 1 January 2021 the United Kingdom has been outside the EU customs union. Every item moving between the EU and Great Britain goes through customs, and for VAT it is an export on one side and an import on the other.
So you now deal with two VAT systems that no longer talk to each other: your own country's on one side and British VAT, with a standard rate of 20 %, on the other. The British side is the same for every EU business. The home side follows your own country's VAT law, and that is where you should have it checked.
One exception: for goods, Northern Ireland still follows the EU VAT rules. We explain that separately under Northern Ireland and the Windsor Framework. Everything on this page refers to Great Britain: England, Scotland and Wales.
Goods to British consumers: the £135 rule
If you sell goods from the EU directly to private customers in Great Britain, the value of the consignment decides. At £135 or less, no import VAT is collected at the border. Instead you charge British VAT at the point of sale, as if you were a British retailer. The limit applies to the whole consignment, not to each item in the parcel.
That has an awkward consequence: you must register with HMRC for VAT and file returns. For businesses not established in the UK there is no registration threshold. The well-known £90,000 limit applies only to UK businesses; if you supply British customers from abroad, you register whatever your turnover. The old import relief for small consignments up to £15 has gone.
If you sell through an online marketplace, the marketplace takes over the VAT on these consignments and becomes liable for it. Above £135 the normal import rules apply: your customer or your carrier declares the goods, and import VAT and any duty are due at the border. How that works in practice is in UK customs after Brexit: EORI, commodity codes, imports.
Change is coming on the customs side: the British government has announced it will abolish the customs duty relief for consignments up to £135. The new rules take effect on a date the Treasury sets by regulations, by October 2028 at the latest. For the VAT logic at the point of sale that changes nothing for now.
Goods to British businesses, and stock held in the UK
If you sell a consignment up to £135 to a British business that gives you its VAT number, you charge no British VAT. The invoice carries a reverse-charge note, and the customer accounts for the tax on its own return. If you only sell to VAT-registered British businesses and the goods are outside the UK at the time of sale, you do not need to register for that.
It is a different story once your goods are already in Great Britain, say in a fulfilment warehouse. Then you must register as an overseas seller whatever the value and charge British VAT on every sale to customers in the UK. That is the classic case where a UK VAT Registration cannot be avoided.
On your side, the shipment to the UK is an export. How your own country treats it, and which proof it wants that the goods really left the EU, follows your home VAT law; keep the export documents either way.
Services: invoicing into Great Britain
The UK applies a simple basic rule to services, with important exceptions (for example services connected with land or certain events):
| Case | Where is it supplied for UK VAT? | Who accounts for the VAT? |
|---|---|---|
| You advise a British company (B2B) | in the UK, where the customer belongs | the British customer, by reverse charge |
| You provide a general service to a British consumer (B2C) | as a rule where you belong | you, under your home rules |
| You sell digital services (downloads, apps, streaming) to British consumers | in the UK | you, with a UK VAT registration, or the platform you sell through |
| A British company advises your EU business (B2B, invoice from the UK) | outside the UK, where you belong | you, under your own country's VAT rules |
HMRC VAT Notice 741A; VAT rules for supplies of digital services to consumers
Digital services and platforms
For digital services to consumers the UK has no small-seller exemption for overseas suppliers. If you sell e-books, software subscriptions, automatically delivered online courses or apps to British consumers, the supply is taxable in the UK and you must register. If the sale runs through a platform or app store, the platform is responsible for the VAT and you are out of it.
The classification matters more than the tax: a live, personalised workshop on Zoom is not an automated digital service; a pre-recorded video course is. Get that wrong and you register too late, or not at all.
Invoices and goods from Britain: the EU side
An invoice from a British business for services to your EU company arrives without British VAT. How you then account for it at home, typically by self-assessing under the reverse charge, is set by your own country's VAT law; ask whoever keeps your books which box it goes in.
Buy goods in Great Britain and import VAT arises when they enter the EU, together with a customs declaration. For consumers ordering online from the UK, 2026 is a turning point: the EU abolished the duty relief for consignments up to €150 with effect from 1 July 2026. Distance sales up to €150 now carry a flat duty of €3 per item category, and since 1 November 2026 a Union handling fee of €2 per item category comes on top, whatever the value.
And the VAT you paid as a tourist in a London shop? You no longer get it back. The UK abolished the VAT refund scheme for tourists and tax-free airport shopping when the transition period ended on 31 December 2020.
Questions about VAT and the UK
Does my invoice to a British business carry home VAT?
For UK VAT purposes a B2B service to a British business is supplied in the UK and the customer accounts for it by reverse charge. Whether your home invoice shows VAT is decided by your own country's VAT law. For goods shipped to the UK, the sale is an export on your side.
Do I have to register for VAT in the UK?
Yes, as soon as your business, not established in the UK, makes taxable supplies in Great Britain: consignments up to £135 to consumers without a marketplace, sales from a UK warehouse or digital services to consumers. There is no threshold for this.
Do I need a tax representative in the UK?
HMRC treats a VAT tax representative as optional: businesses that want one appoint one with form VAT1TR. For imports, though, without a UK establishment you will in practice need someone to file the customs declarations for you.
What is the VAT rate in the UK?
The standard rate of British VAT is 20 %. Reduced and zero rates apply to certain goods.
Can I reclaim British VAT as a private person?
Not through a tourist refund scheme; the UK abolished it at the end of 2020. If you ordered online, returned the goods and paid VAT at checkout, the seller or marketplace refunds it. More in returns after Brexit.
Sources: GOV.UK: VAT and overseas goods sold directly to customers in the UK; GOV.UK: VAT and overseas goods sold to customers in the UK using online marketplaces; GOV.UK: Register for VAT; GOV.UK: VAT rates; GOV.UK: Place of supply of services (VAT Notice 741A); GOV.UK: VAT rules for supplies of digital services to consumers; GOV.UK: Appoint a tax representative (VAT1TR); GOV.UK: Revenue and Customs Brief 21 (2020); GOV.UK: Reforming the customs treatment of low value imports
