B2B e-commerce to UK above GBP 135 — who handles import and VAT

This guide is the B2B companion to our pillar article The GBP 135 limit for e-commerce to the UK — when you pay VAT and when you don't. If you sell to consumers (B2C), start there. This article is for EU businesses selling to UK businesses — wholesalers, brick-and-mortar retailers, offices, factories — under a commercial order or on a B2B platform.

Short answer: who is the IOR and who pays VAT in B2B above GBP 135?

In a B2B transaction where an EU seller ships goods to a UK-registered business and the consignment exceeds GBP 135:

• Importer of Record (IOR) — the UK buyer. They file the CDS import declaration under their GB EORI (GOV.UK — VAT on goods sold from overseas).
• Who pays duty — the UK buyer, unless Incoterms specify DDP (in which case the seller pays duty and VAT through a UK agent).
• Who accounts for VAT — the UK buyer, typically using PVA (self-assessed in the VAT return, with no payment to HMRC before the goods are released).
• The seller's invoice — a commercial invoice at 0% VAT (export outside the EU), with the buyer's GB EORI and GB VAT number mandatory on the face of the invoice.

You essentially don't apply the GBP 135 threshold here — it was designed for low-value consumer (B2C) sales. In B2B the buyer's status (a business) drives the treatment, not the amount. This is reflected in HMRC Notice 700/9 on place of supply.

Why B2B works differently from B2C — the reverse-charge mechanism

After Brexit, the UK VAT system kept the principle that treating a B2B import as a domestic sale makes no sense. Rather than require the EU seller to register for UK VAT and charge tax to a UK business, HMRC applies a classic reverse charge: VAT is accounted for by the buyer, who can normally recover it as input tax anyway.

In practice, that's two entries in the buyer's bookkeeping:

1. Output VAT on the import (standard 20%) — box 1 of the VAT return.
2. Input VAT of the same amount in the same return — box 4.

If the business has full input-tax recovery, the cash-flow effect is neutral — no money leaves the account. That's exactly what Postponed VAT Accounting (PVA) does. HMRC introduced it on 1 January 2021 as the default way for UK VAT-registered businesses to account for import VAT (GOV.UK — Postponed VAT Accounting).

The most common mistake: adding domestic VAT to a UK invoice

The EC team regularly talks to sellers who have raised an invoice to a UK business with their local VAT rate — only to see the buyer refuse payment or demand a corrected invoice. The reason is simple: non-UK VAT does not exist in UK accounting. A UK business cannot reclaim it on its VAT return — it is not UK input tax. The only route to recovery is a refund claim through the seller's tax authority (the 13th Directive procedure for non-EU entities, which is slow and costly).

For the seller it's a double problem: the buyer complains, and at the next VAT audit the tax office will ask why domestic VAT was charged rather than 0% (export) — which requires the IE-599 proof of export and a reposting.

B2C vs B2B to the UK above GBP 135 — side by side

What the commercial invoice must contain for a UK B2B buyer

A clean commercial invoice is what lets the buyer clear the goods without delay and lets the seller justify 0% VAT on their local return. The minimum fields you cannot afford to miss:

• Seller details — full legal name, address, local tax ID, EU EORI.
• Buyer details — full UK company name, address, GB VAT number (format "GB123456789"), GB EORI (format "GB123456789000").
• Incoterms 2020 — usually DAP (buyer clears) or DDP (seller clears). Incoterms 2020 are preferred by HMRC.
• Goods description and HS code — 6–10 digits of the UK Global Tariff; classification on the UK side is confirmed against the UK Trade Tariff.
• Country of origin — for "made in EU" goods, allows 0% preferential duty on the basis of a statement on origin (TCA).
• Value in GBP — or EUR with the exchange rate shown. HMRC accepts both, but GBP is the UK customs standard.
• VAT rate: 0% with a note "Export outside EU — zero-rated" or "Reverse charge, customer to account for VAT".
• Payment terms and due date — for the buyer's accounting and HMRC due-diligence checks.

Detailed CDS field requirements on the UK side are set out in the HMRC CDS Declaration Completion Guide.

Step-by-step B2B procedure (EU seller → UK buyer)

Step 1 — verify the buyer

Confirm the buyer is a business, not a consumer. Ask for their GB EORI and GB VAT number. You can verify the GB EORI in the HMRC EORI checker. If the buyer has no GB EORI, they need to register first — themselves or via an agent. On your side you'll need an EU EORI.

Step 2 — agree Incoterms

For B2B above GBP 135 the usual options are:

• DAP (Delivered At Place) — the seller organises transport to the buyer's premises, but the buyer clears import and pays duty plus VAT. The most common B2B arrangement.
• DDP (Delivered Duty Paid) — the seller covers everything, including UK clearance. For DDP you need a UK customs agent and usually indirect customs representation, because an EU-only business cannot be IOR without a GB EORI.
• EXW/FCA — the buyer collects the goods at the seller's premises or at an EU forwarder. Minimal seller responsibility.

When DDP is worth it: when the buyer wants a single "all-in price", you're competing for the contract and the duty difference is small. When it isn't — consignments above 20–30 kg, high value, complex classification: stick with DAP and let the buyer clear on their own EORI.

Step 3 — issue the zero-rated commercial invoice

Format as per "What the commercial invoice must contain" above. Domestic VAT on such an invoice is a mistake — export outside the EU is zero-rated under local VAT law, provided you hold proof of export (IE-599).

Step 4 — export clearance (IE-599)

Submit the export declaration in the national AES system (yourself or via an EU customs agent). You receive the IE-599 message as electronic proof that the goods left the EU. Without an IE-599 the tax office can disallow the zero rate on your VAT return.

Step 5 — transport and UK import clearance

The UK buyer (or their agent) files the import declaration in CDS. The UK agent needs: commercial invoice, packing list, CMR/AWB, statement on origin (if claiming 0% preferential duty under the TCA) and any additional certificates (CE, UKCA, phytosanitary — depending on the goods).

Step 6 — buyer accounts for VAT via PVA

The buyer logs into their HMRC account and downloads the monthly PVA Statement (MPIVS). On that basis they populate their VAT return: output VAT (box 1), net value of imports (box 7), input VAT (box 4). Net effect: no payment to HMRC.

Step 7 — keep the paper trail

The seller keeps the IE-599, commercial invoice, CMR/AWB, order confirmation and proof of payment for at least 5 years. This is your evidence pack for a VAT audit, and for any HMRC audit touching the buyer.

When DDP pays off and when DAP wins

Choosing Incoterms in B2B isn't cosmetic — it changes who carries the customs and financial risk. Three practical scenarios from EC's casework:

1. Small contract, new UK client, low value (GBP 2–5k) — DDP wins. The client doesn't want "clearance hassle" and the cost difference is marginal. Pay a UK agent and deliver a one-stop experience.
2. Regular deliveries to a large buyer (GBP 10k+ per month) — DAP. A large client has their own customs agent and knows what they're doing. Forcing DDP only delays payment and adds risk on your side.
3. Regulated goods (food, cosmetics, electronics) — DAP, provided the buyer has the expertise. DDP requires in-depth knowledge of UK certification requirements, which the UK buyer usually handles better than an overseas seller.

We cover the legal detail of UK representation (critical for DDP) in a separate guide: Direct and indirect customs representation in the UK.

The Importer of Record role in B2B

The Importer of Record (IOR) concept ties together all the fiscal and customs obligations. In B2B the IOR is always the UK buyer — because they hold:

• a GB EORI to file CDS declarations,
• a GB VAT number to use the reverse charge and PVA,
• the legal capacity to answer to HMRC in the event of an audit.

An EU seller cannot be the UK IOR unless they register for GB VAT and a GB EORI and use indirect customs representation. For typical B2B that's unnecessary overhead — DAP with the buyer as IOR is cheaper and simpler.

How does the GBP 135 threshold apply in B2B?

Short answer: effectively it doesn't. The GBP 135 threshold from the B2C Low Value Consignments regime was introduced mainly so that platforms like Amazon and eBay charge VAT at checkout to consumers. In B2B, where the buyer has a GB VAT and GB EORI, the marketplace mechanism doesn't apply — even when the transaction flows through a B2B platform. Whether the value is GBP 50 or GBP 5,000, the pattern is identical: buyer = IOR, PVA, 0% VAT on the commercial invoice.

The only practical difference appears in the simplified CDS declaration for low-value consignments (bulk import reduced data set, H7) — but that's a technical simplification for the customs agent, not a change to the tax liability.

What follows from current official guidance

Before each shipment it's worth checking current CDS Declaration Completion Guide and Notice 700/9 requirements, because HMRC periodically updates additional procedure codes, declaration fields and required supporting documents. For this topic the primary sources are GOV.UK — VAT on goods sold from overseas, HMRC Notice 700/9 and the Postponed VAT Accounting guidance.

Official sources

• GOV.UK — VAT on goods sold from overseas — HMRC, verified 19 April 2026
• GOV.UK — Postponed VAT Accounting (PVA) — HMRC, verified 19 April 2026
• HMRC Notice 700/9 — Place of supply of goods — HMRC, verified 19 April 2026
• UK Trade Tariff (HS codes) — HMRC, verified 19 April 2026

Frequently asked questions (FAQ)

Do I need to register for GB VAT to sell B2B into the UK?

No — provided your only activity is exporting to UK businesses that handle import VAT themselves (as IOR). GB VAT registration is only needed for DDP with UK stock, or for B2C sales through your own store (the GBP 70,000 threshold no longer applies to non-UK established sellers).

What if the UK buyer has no GB VAT or GB EORI?

Then they are not a genuine B2B buyer in HMRC's view. You can: (1) ask them to register — a GB EORI is free and takes 3–5 working days; (2) treat the transaction as B2C (consumer), with VAT collected by the courier; (3) decline the shipment. Do not issue a reverse-charge invoice without the buyer's GB VAT — it's a formal error.

For B2B DDP, do I have to pay UK import VAT in cash?

No — as a seller with a GB EORI and GB VAT registration you can use PVA. You account for VAT on your UK VAT return, no cash required. The UK customs agent must be instructed to "use PVA" on the CDS declaration.

How long must I keep the IE-599 as proof of export?

EU rules typically require 5 years from the end of the year in which the tax point arose. HMRC requires 6 years for buyer records. In practice, archive 6+ years, ideally in the cloud with a backup.

Can I apply 0% preferential duty for "made in EU" goods?

Yes — the UK-EU Trade and Cooperation Agreement (TCA) provides for 0% duty, subject to meeting the rules of origin and including a statement on origin on the invoice. For goods worth over EUR 6,000 the exporter needs a REX number.

What do I do if I mistakenly charged domestic VAT on a UK B2B invoice?

Issue a corrective invoice at 0% VAT (export), send it to the buyer, and report the correction in your VAT return. If you hold the IE-599, you have the basis for zero-rating. Don't maintain "two versions" of the invoice — HMRC and the tax office read the same document as evidence of the transaction.

Does a B2B platform (Alibaba, Faire) collect VAT on a UK B2B transaction?

Not under the "deemed supplier" rule — that only applies to B2C under GBP 135. A B2B platform is tax-neutral: the invoice and tax obligations sit directly between the seller and the UK buyer. Check the platform's terms, because some (Amazon Business) have their own variations for mixed transactions.

How easyclearance.pl supports B2B sellers into the UK

The EC team supports dozens of businesses exporting B2B to the UK each month — from small-batch cosmetics wholesale to container loads of components. Typical operational support:

• Commercial invoice audit — a pre-shipment check that the invoice has the right fields (GB EORI, GB VAT, Incoterms, 0% VAT, HS codes) so the goods don't get held up at the border.
• EU export clearance — AES filing, IE-599 as evidence for the tax office, cross-check with the contract.
• UK import clearance for DDP — as a UK customs agency based in Richmond we can act as your direct or indirect customs representative, filing the CDS import on the client's GB EORI.
• Incoterms advice — whether DDP makes sense for your contract or whether DAP is the better fit.
• Transport coordination — liaison with forwarders, oversight of CMR and AWB.

Note on scope: easyclearance.pl is a UK-based customs agency. We handle UK customs clearance directly. EU-side export clearances are delivered in cooperation with our network of licensed local partners.

Summary

B2B selling to the UK above GBP 135 is simpler than many EU sellers think — provided you follow the right pattern:

1. The UK buyer is the Importer of Record — on their GB EORI and GB VAT.
2. The buyer accounts for import VAT via PVA (reverse charge) — no cash.
3. The EU seller issues a commercial invoice at 0% VAT with the buyer's mandatory identifiers.
4. The IE-599 from the EU AES system is your evidence for zero-rating on the VAT return.
5. The GBP 135 threshold doesn't apply in B2B — the buyer's status drives it, not the amount.

The biggest mistake is adding domestic VAT to an invoice for a UK business. If a client has returned your invoice with a "wrong VAT" note, the EC team will help you raise the correction and supply the IE-599 as proof of export.