For B2C sales to the UK in consignments worth up to 135 GBP, the seller charges VAT at the point of sale and reports it in a UK VAT return, and no customs duty applies. For B2B with the buyer's VAT number, the customer accounts for the tax through the reverse charge. Above 135 GBP, normal import rules apply: a customs declaration, import VAT and possibly duty. Valid as of August 2026.
B2C up to 135 GBP: the seller collects VAT
For consumer consignments up to 135 GBP the UK moved VAT collection from the border to the checkout. The overseas seller registers for UK VAT and adds the tax at sale. If the sale goes through an online marketplace, the marketplace is responsible for collecting and reporting the VAT. The goods cross the border without import VAT and without duty, which simplifies clearance but demands clean data: value, currency and description must match what was declared at sale.
Careful: IOSS does not work in Great Britain
The EU IOSS scheme covers imports into EU member states only and does not apply to sales to England, Scotland or Wales. Sellers used to IOSS in the EU must switch to a UK VAT registration for GB. Northern Ireland is a separate story, as it remains under special arrangements for goods.
B2B: reverse charge instead of the checkout
When the buyer is a UK business that provides its VAT number, the seller does not add tax on consignments up to 135 GBP; the invoice carries a reverse charge note and the customer accounts for VAT in its own return. Above 135 GBP, standard B2B import applies: a full customs declaration, import VAT (most often settled without cash through PVA, described in our article on Postponed VAT Accounting) and duty, unless the goods qualify for the zero tariff under the trade agreement.
What differs in transport practice
- B2C usually means many small parcels: they travel through courier channels, and our role starts with consolidated pallets into fulfilment warehouses.
- B2B means pallets and full loads with one customs declaration per consignment, where the consignee's EORI and a complete invoice set are key.
- Delivery terms (who acts as importer) must be agreed before dispatch; the differences between DDP and DAP are covered in a separate article on DDP and DAP.
What will change: the end of the duty-free threshold
In November 2025 the UK government announced the removal of the customs duty relief for consignments up to 135 GBP; the new system is due by March 2029 at the latest. In August 2026 the relief still applies, but e-commerce sellers should watch this topic, because the change will reshape pricing for small consignments.
Sources
- GOV.UK: VAT and overseas goods sold directly to customers in the UK
- GOV.UK: VAT and goods sold through online marketplaces
- GOV.UK: consultation on the customs treatment of low value imports
Shipping e-commerce stock by the pallet into UK warehouses? See our guide to e-commerce transport to the UK or write via the contact form. We organise the clearance within the order, together with the customs agencies we work with permanently.
