The UK is one of the largest and most popular global markets. From the UK, the EU is easily accessible, and through close proximity to these lucrative markets, you have ample opportunity to expand and solidify your international business. However, with such fluctuation in legislation, tariffs and fees, keeping up to speed with all things VAT related is tricky but it’s a must! We’ve got you covered with our little helpful guide about selling to the UK and the EU for e-commerce retailers. 


VAT in the UK and EU

The popularity of online shopping means Britain is an extremely attractive market for global e-commerce retailers. With over 60 million digital buyers in 2022, e-commerce is an essential industry for overseas companies looking to reach new customers. For EU and non-EU businesses looking to sell to the UK, understanding your VAT triggers and when registration is necessary is key. For UK and non-EU businesses interested in selling to the EU, VAT should also be an essential part of your expansion plan. VAT obligations for each business will differ depending on where you are based and where your customers are located.

In the last two years, EU and UK VAT has gone through many changes. From Brexit to the July 2021 VAT update, you may have felt discouraged from expanding into new markets. These changes, however, were made to aid e-commerce retailers and simplify the compliance process. Interested in getting set up in the UK and/or EU? You’ll need to know where your business stands with VAT compliance first.                                                                                                            

Selling in the UK as an EU-based or non-EU based business

The VAT requirements for selling into the UK differ for EU and non-EU based businesses. 

Cost of holding inventory

Holding inventory as a business will always trigger a VAT registration obligation. It will however vary depending on what platform you use to sell. Depending on where you hold inventory will determine what VAT charges are applied.  

  • If you are holding inventory in the UK for sale via your own website

This action will trigger a VAT registration obligation as holding inventory creates a taxable supply. So that you can hold inventory within the UK, you would need to apply for a UK EORI number in order to get through customs.

When using your own website to sell to UK customers you will need to charge VAT at point of sale. Plus, when you import goods into the UK to be held for onward sale to UK customers, you will be able to reclaim this expense through your UK VAT return. 

  •  If you are holding inventory in the UK for sale via a marketplace

Holding inventory for sale via a marketplace will also trigger a VAT registration obligation. Often this will mean you are importing goods to be held at warehousing facilities.

When distance selling through a marketplace to UK customers, the marketplace will become responsible for charging and collecting VAT from the customer. However, you could keep your UK VAT registration so that you can reclaim import VAT when sending goods to marketplace warehousing.


  • Importing goods into the UK for sale via a marketplace or website

From January 2021, marketplaces were given additional responsibility in charging and collecting VAT on sales made to UK customers. So, for non-EU businesses using a marketplace to sell but import goods as and when, this will apply to you. When you sell goods to UK customers in consignments of less than £135 on a marketplace and these goods are outside the UK at point of sale, the marketplace will be responsible for collecting VAT on your behalf.

If you are using your own website to sell to UK customers and import goods when you need to, you will be liable to register for VAT before your first sale and charge UK VAT on each sale you make. This will also include any import VAT and duties you may incur.


  • HMRC import VAT reclaim

If you are registered for VAT in the UK as a non-UK business, you cannot use the refund scheme to reclaim VAT paid on goods imported into the UK from outside the EU. You will however be able to reclaim the VAT on your VAT return as input tax.


Selling in the EU as a UK or non-EU based business

Equally, there are changes in the cost of holding inventory for UK and non-EU businesses looking to sell to the EU. 

  • Holding inventory in the EU for sale via your own website

For UK and non-EU businesses, importing inventory to be held in storage facilities and sold via your own website will require you to have a VAT registration at that location. You will also be required to have Union OSS registration to account for all intra-EU cross-border sales made through your online website.


  • Holding inventory in the EU for sale via a marketplace

If you are a UK or non-EU business using an EU marketplace warehouse facility to store goods for sale, you must VAT register in the country where your goods are stored. If you are making distance sales to EU customers from inventory outside of the EU, the marketplace will take responsibility for charging and collecting VAT from your EU customers. This will also apply to all intra-EU sales.


  • Importing goods into the EU for sale via a marketplace or website

For non-EU based businesses importing goods in consignments to EU customers, your VAT obligation will relate directly to your consignment value. For both marketplace and own website users this will be the same. If your consignments do not exceed the EUR 150 limit, VAT will be due where your customer is based, and you will be eligible to report this via the IOSS (Import One Stop Shop) Scheme. However, if the value of your consignments exceeds this threshold, normal customs procedures will apply, and import VAT will need to be paid upon importation by the Importer of Record. 

The Import One-Stop Shop (IOSS) is for both EU and non-EU businesses and marketplaces, to report the VAT due on B2C distance sales of imported goods to EU customers. This could be a fantastic option for your business as it enables you to reduce administrative burden, speed up customs processes and give customers greater visibility over how much they pay for their goods.

Selling to the UK or EU with The Storage Place

If you need help getting registered for VAT, getting an EORI number or understanding your requirements we will be able to assist your business. For any questions about your potential liabilities when trading in the EU or UK, speak to a member of our team and they can walk you through your business’ requirements to help you get set up.

The UK and EU market could be the expansion environment your business needs and with TSP you can get set up and start selling care-free! As the end of the year beckons, there will be multiple tasks to juggle, so setting your VAT compliance and ensuring it’s in safe hands is an ideal solution.