£135 e-commerce limit to the UK – when do you pay VAT and when not? [2026]

From 1 January 2021, the United Kingdom introduced a new VAT accounting system for low value consignments. Key change: £135 threshold This determines who and how VAT is settled for B2C (business-to-consumer) sales to the UK.

For Polish companies selling via e-commerce platforms (Amazon UK, eBay UK) or own online stores, understanding this system is key to avoiding double taxation and customs clearance issues.

This article explains how the £135 limit works, who is responsible for VAT, the obligations of e-commerce platforms, and how to avoid common mistakes.

Problem: New VAT system for e-commerce

What changed after 1 January 2021?

Before Brexit: - Shipments to the UK under £15 were VAT exempt. - Shipments £15-£135 required VAT payment at customs clearance. After Brexit (from 1.01.2021): - VAT exemption abolished for shipments under £15. - A £135 threshold has been introduced – determines VAT settlement method. - E-commerce platforms (Amazon, eBay) have become responsible for VAT settlement on shipments under £135.

How does the £135 limit work?

Shipments under £135 (B2C)

Who settles VAT: - E-commerce platform (if the sale is made via Amazon UK, eBay UK, etc.) – The platform collects VAT from the customer and settles it with HMRC. - Seller (if sales are made through own online store) – The seller must register for VAT in the UK and settle VAT independently. When VAT is paid: - At the moment of sale (online checkout) – VAT is added to the price and collected from the customer. - Not during customs clearance – The goods are cleared without paying VAT at the border. Requirements: - The invoice/receipt must include the information: "VAT paid in UK" or "VAT included". - The customs declaration must include a procedure code indicating VAT has already been accounted for.

Shipments over £135 (B2C)

Who settles VAT: - Importer (client in the UK) – VAT is paid at customs clearance. When VAT is paid: - During customs clearance – The client pays VAT (20%) + duty (if applicable) before collecting the shipment. Requirements: - Standard import procedure. - The client must pay VAT and duty before collecting the goods (usually via courier).

B2B shipments (regardless of value)

Who settles VAT: - Importer (company in the UK) – VAT is accounted for by the UK company (reverse charge or Postponed VAT Accounting). When VAT is paid: - In the importer's VAT declaration – Not during customs clearance. Requirements: - Importer must have VAT GB and EORI GB numbers.

Obligations of e-commerce platforms (Amazon UK, eBay UK)

Deemed Supplier Rules

From 1 January 2021, e-commerce platforms are recognised as "deemed supplier" (deemed supplier) for shipments under £135 sold by sellers outside the UK.

What does this mean? - The platform is responsible for VAT accounting with HMRC. - The platform collects VAT from the customer at the point of sale. - The platform submits VAT to HMRC in its VAT return. For the seller: - Seller does not have to register for VAT in the UK (if selling only via platform). - Seller receives payment without VAT (the platform withholds VAT).

How does it work in practice?

Example: Sale via Amazon UK

1. Polish seller lists product on Amazon UK for £100. 2. UK customer buys the product. 3. Amazon UK adds 20% VAT = £20. 4. Customer pays £120 (£100 + £20 VAT). 5. Amazon UK pays seller £100 (excluding VAT). 6. Amazon UK settles £20 VAT with HMRC.

For the seller: - Receives £100 (net price). - Does not have to account for VAT in the UK. - Must ensure the goods are cleared through customs without paying VAT at the border.

How to mark a shipment to show VAT has been paid?

Customs requirements

For goods to be cleared without paying VAT at the border, the customs declaration must include:

1. Procedure code: Indicating that VAT has already been accounted for (e.g. code "H7" in the CDS system). 2. Information on the invoice: "VAT paid in UK" or "VAT included". 3. Platform VAT number (if applicable) – Amazon UK, eBay UK have their own GB VAT numbers.

Role of the courier company

If you send goods by courier (DHL, FedEx, UPS), the courier company: - Submits the customs declaration on your behalf. - Ensures the procedure code indicates VAT accounted for. - Delivers the goods to the customer without additional charges.

Important: Ensure the courier company knows that VAT has already been paid (by the platform or by you).

Sales via own online store (under £135)

Do I need to register for VAT in the UK?

Yes, if: - You sell B2C (to consumers) in the UK. - The shipment value < £135. - Sprzedaż odbywa się przez Twój własny sklep (nie przez platformę e-commerce).

How does it work?

1. Register for VAT in the UK (obtain VAT GB number). 2. Add 20% VAT to the product price at the point of sale (online checkout). 3. Collect VAT from the customer. 4. Report VAT in the UK VAT return (MTD - Making Tax Digital). 5. Ship the goods with the note "VAT paid in UK".

Cost: - GB VAT registration: £0 (free). - Tax representative/VAT agent: £500-£1,500/year. - MTD software: £10-£50/month. More information: VAT registration in the UK for Polish companies

Frequently Asked Questions (FAQ)

Does the £135 limit include shipping costs?

No. The £135 limit applies to value of goods (excluding shipping and insurance costs).

Example: - Goods value: £130 - Shipping cost: £10 - Value for the limit: £130 (below £135) → VAT accounted for by the platform/seller.

Does the £135 limit also apply to B2B?

No. The £135 limit applies only to sales B2C (to consumers). B2B sales (to companies) are accounted for by the UK importer (reverse charge or PVA), regardless of value.

What happens if I do not indicate that VAT has been paid?

The client will have to pay VAT again at customs clearance (double taxation). This may lead to: - Customer complaints. - Return of goods. - Negative reviews.

Can I sell via Amazon UK without VAT GB registration?

Yes, if the shipment value < £135. Amazon UK rozliczy VAT jako "deemed supplier".

Does the £135 limit apply to all goods?

No. Excise goods (alcohol, tobacco) have separate rules and are not subject to the £135 limit.

How can easyclearance.pl assist?

E-commerce VAT advisory

Our team can help you: - Determine if you need to register for VAT in the UK. - Configure VAT settlements on e-commerce platforms (Amazon, eBay). - Prepare customs documentation with the correct procedure code.

Coordination with courier companies

We can assist with: - Ensuring the courier company is aware of the VAT accounted for. - Preparing customs declarations with the "VAT paid" code. - Resolving double taxation issues.

Support with GB VAT registration

If you sell via your own online store, we can: - Assist with VAT registration in the UK. - Refer you to trusted VAT agents. - Support you with MTD compliance.

Distinction: easyclearance.pl is a customs agency based in the UK. We directly handle clearances in Great Britain. If your shipment requires customs clearance in Poland or another EU country, we coordinate the process through our network of licensed local partners.

Summary

The £135 limit is a key threshold in e-commerce to the UK. Key rules:

1. Shipments < £135 (B2C): VAT accounted for by the e-commerce platform or seller (at the point of sale). 2. Shipments > £135 (B2C): VAT paid by the client at customs clearance. 3. B2B shipments: VAT accounted for by the importer (regardless of value). 4. Marking: Invoice must state "VAT paid in UK".

Need help with e-commerce VAT to the UK?

If you sell via e-commerce platforms or your own online store to the UK, contact easyclearance.pl. We assist with VAT settlements and customs clearance.

easyclearance.pl is a customs agency based in the United Kingdom. We directly handle clearances in the UK. Customs clearances within the EU are carried out in cooperation with our network of licensed local partners. Contact us →

What the current official guidance means in practice

For operational work, the current procedural rules, declaration fields and relief conditions should be checked directly against the official guidance. For this topic, the core reference points are GOV.UK / HMRC, European Commission.

Official sources

• UK GOV (Import VAT & PVA) — GOV.UK / HMRC, 2026-03-04
• EU Commission (Customs procedures) — European Commission, 2026-03-04
• GOV.UK: tax and duty on goods sent from abroad — GOV.UK / HMRC, 2026-03-04