How does UK import VAT work for non-UK sellers? — Import VAT on Goods >£135

Declare goods value to HMRC at import. Pay 20% import VAT (can be deferred with DDA). Import VAT is reclaimable if you're VAT registered. Cost: 20% of declared value. Timeline: At import.

How does UK import VAT work for non-UK sellers? — Low Value Goods <£135

No import VAT for goods under £135. Online marketplaces collect 20% VAT at point of sale. If selling on your own website, you collect VAT directly. Cost: VAT collected at sale. Timeline: At point of sale.

How does UK import VAT work for non-UK sellers? — Duty Deferment Account

Apply for a Duty Deferment Account with HMRC. Defer import VAT and customs duty payment. Settle monthly via direct debit. Cost: Free to set up. Timeline: 2-4 weeks.

How does UK import VAT work for non-UK sellers?

Q: How does UK import VAT work for non-UK sellers?

UK import VAT applies when goods arrive in the UK from overseas. The standard rate is 20% on all goods regardless of value. For consignments valued at £135 or less, import VAT is collected at the point of sale by online marketplaces (since January 2021) rather than at customs. For consignments over £135, import VAT is charged at the border. For FBA sellers: goods stored in UK warehouses attract import VAT on entry. You can defer import VAT using a Duty Deferment Account. Non-UK sellers must register for UK VAT if they store goods in the UK.

Q: How does UK import VAT work for non-UK sellers? — Low Value Goods <£135

No import VAT for goods under £135. Online marketplaces collect 20% VAT at point of sale. If selling on your own website, you collect VAT directly. Cost: VAT collected at sale. Timeline: At point of sale.

Q: How does UK import VAT work for non-UK sellers? — Duty Deferment Account

Apply for a Duty Deferment Account with HMRC. Defer import VAT and customs duty payment. Settle monthly via direct debit. Cost: Free to set up. Timeline: 2-4 weeks.

Last updated: 2026-08-17·Verified: 2026-08-02Method & sources

Sources:HMRC Import VAT HMRC VAT Notice 702

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📋 Direct Answer

UK import VAT applies when goods arrive in the UK from overseas. The standard rate is 20% on all goods regardless of value. For consignments valued at £135 or less, import VAT is collected at the point of sale by online marketplaces (since January 2021) rather than at customs. For consignments over £135, import VAT is charged at the border. For FBA sellers: goods stored in UK warehouses attract import VAT on entry. You can defer import VAT using a Duty Deferment Account. Non-UK sellers must register for UK VAT if they store goods in the UK.

Requirements

20% on goods >£135

Est. Total Cost

Immediate

Timeline

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📝 Step-by-Step Guide

Total 9 steps·Est. At import

Prerequisites

•Import VAT on Goods >£135

1
Import VAT on Goods >£135 - Step 1
Declare goods value to HMRC at import
2
Import VAT on Goods >£135 - Step 2
Pay 20% import VAT (can be deferred with DDA)
3
Import VAT on Goods >£135 - Step 3
Import VAT is reclaimable if you're VAT registered
4
Low Value Goods <£135 - Step 1
No import VAT for goods under £135
5
Low Value Goods <£135 - Step 2
Online marketplaces collect 20% VAT at point of sale
6
Low Value Goods <£135 - Step 3
If selling on your own website, you collect VAT directly
7
Duty Deferment Account - Step 1
Apply for a Duty Deferment Account with HMRC
8
Duty Deferment Account - Step 2
Defer import VAT and customs duty payment
9
Duty Deferment Account - Step 3
Settle monthly via direct debit

💰 Cost Breakdown

Item	Cost	Frequency
Import VAT (20% standard rate)	20% of (value + shipping + duty)	per-shipment
Customs broker fee(optional)	$50-200/shipment	per-shipment
Duty Deferment Account guarantee(optional)Bank guarantee for deferred payments	$500-5,000	one-time
Total Estimate	$50 – $5,000+	per shipment

⚠️WARNING

Import VAT cash flow impact

You must pay import VAT at the border before goods are released, which can strain cash flow

🛡️ Prevention Steps

✓Consider postponed VAT accounting (PVA) if VAT registered
✓Budget for import VAT in your working capital

Item by Item

RequiredImport VAT on Goods >£135

20% of declared valueAt import

1Declare goods value to HMRC at import
2Pay 20% import VAT (can be deferred with DDA)
3Import VAT is reclaimable if you're VAT registered

Read full guide →Use tool →

InfoLow Value Goods <£135

VAT collected at saleAt point of sale

1No import VAT for goods under £135
2Online marketplaces collect 20% VAT at point of sale
3If selling on your own website, you collect VAT directly

Read full guide →

RecommendedDuty Deferment Account

Free to set up2-4 weeks

1Apply for a Duty Deferment Account with HMRC
2Defer import VAT and customs duty payment
3Settle monthly via direct debit

Read full guide →

Comparison

	IOSS (Import One-Stop Shop)	OSS (One-Stop Shop)	Country-by-country registration
Pros	✓ Single EU-wide VAT registration ✓ Buyer pays VAT at checkout, no customs delays	✓ Covers all EU member states ✓ No €150 limit ✓ Works for B2C domestic and distance sales	✓ Full control over each market ✓ Required for B2B sales ✓ No value limit
Cons	✗ Only for goods under €150 ✗ Monthly filing required ✗ Not available for B2B	✗ Does not cover import VAT for goods over €150 ✗ Requires separate import VAT registration for high-value goods	✗ Multiple registrations and filings ✗ Higher compliance cost ✗ Complex bookkeeping
Best For	High-volume B2C sellers shipping low-value goods directly to EU consumers	Sellers with EU warehouses or FBA stock selling B2C across EU	Sellers with significant B2B revenue in specific EU countries
Est. Cost	€0-50/month filing service + free registration	€0-100/month filing service + free registration	€500-2,000/year per country for tax agent + filing

VAT Threshold Calculator

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Common Mistakes

❌ Not accounting for import VAT in pricing

💥 Consequence: Margins eroded by unexpected costs

✅ Fix: Include import VAT in your landed cost calculations

❌ Assuming de minimis applies to all goods

💥 Consequence: Unexpected VAT bills at customs

✅ Fix: Check de minimis thresholds by product type and origin

Seller Paths

UK Import VAT Registration

1. Check if VAT registration is required (threshold £85,000)
2. Register online via HMRC
3. Set up VAT accounting in business systems
4. Prepare for quarterly VAT returns

💰 Free registration⏱ 1-2 weeks

UK Import VAT Optimization

1. Use Postponed VAT Accounting (PVA) to defer payment
2. Claim input VAT on imports
3. Set up correct VAT rates for UK sales
4. Consider VAT flat rate scheme if eligible

💰 Free (accounting setup)⏱ 1-2 weeks

Next Steps

HighDetermine your VAT registration requirement1 week

HighRegister for UK VAT if required2-4 weeks

HighSet up import VAT payment method1 week

Get a free compliance assessment

Continue →