A Shenzhen electronics brand sells £40,000 of goods a year into the UK through its own website. A Singapore SaaS company has a handful of London subscribers paying £19 a month. A Mumbai consultancy invoices a British retailer for design work. Three very different businesses — and all three have a UK VAT question they cannot safely ignore.
The UK's value-added tax regime treats overseas sellers differently from domestic ones, and the differences matter most at the edges: the first sale, the first warehouse, the first marketplace listing. What follows is a calm map of where the obligations actually sit.
The threshold that does not apply to you
The familiar £90,000 UK VAT registration threshold — raised from £85,000 in April 2024 — is widely quoted, and widely misunderstood by overseas businesses. It applies to UK-established businesses. If you have no fixed establishment in the UK, the threshold for you is, in practical terms, zero.
That single fact reshapes planning for non-resident VAT. An overseas seller making taxable supplies in the UK is generally required to register from the first such supply, not after crossing a turnover line. The "establishment" test looks at where human and technical resources sit — a website hosted abroad, a director who occasionally visits London, or a freelancer in Manchester answering emails will each be weighed differently. Cautious sellers assume non-establishment until a UK adviser confirms otherwise.
There are reliefs and simplifications layered on top — notably for low-value imported goods and for supplies made through online marketplaces — but the baseline rule for UK VAT overseas is unforgiving: no domestic threshold, no grace period.
Digital services: the quiet trap
For VAT on digital services in the UK, the rules turn on where the customer is, not where the supplier is. If you sell software downloads, SaaS subscriptions, streamed media, e-books, online courses with no live element, or hosting to a UK consumer, the place of supply is the UK and UK VAT is due.
Two distinctions decide everything:
- B2C vs B2B. Sales to UK consumers require the overseas supplier to register and account for UK VAT. Sales to UK VAT-registered businesses are usually handled by the customer under the reverse charge, leaving the supplier with no UK registration obligation for those flows.
- Direct vs marketplace. If a digital marketplace (an app store, a course platform, a content storefront) is treated as acting in its own name, the marketplace generally becomes responsible for the VAT on sales to consumers. If you sell direct from your own checkout, you are.
The "quiet trap" is the mixed-channel seller — a studio that sells through an app store and a direct website. The marketplace stream may be handled for you; the direct stream is yours to register, charge and remit. Many overseas founders discover this only when a UK accountant reviews their Stripe ledger.
There is no UK equivalent of the EU's €10,000 micro-business threshold for cross-border digital sales. One UK consumer subscription can, in principle, trigger registration.
Goods, marketplaces and postponed VAT accounting
For physical goods, the picture splits at the £135 consignment value line.
- Goods shipped from overseas, consignment value at or below £135. UK supply VAT applies at the point of sale. If sold through an online marketplace, the marketplace accounts for the VAT. If sold direct to a UK consumer, the overseas seller must register for UK VAT and charge it at checkout.
- Goods shipped from overseas, consignment value above £135. Import VAT (and any customs duty) is due at the border. The importer of record reclaims or accounts for that VAT through their UK VAT return.
- Goods already in UK stock — for example, in a fulfilment warehouse. The seller is making domestic UK supplies and must be UK VAT registered from the first sale, regardless of value. Marketplace facilitation rules may shift who accounts for the VAT on consumer sales, but the seller's registration position usually stands.
This is where postponed VAT accounting earns its keep. Rather than paying import VAT in cash at the border and reclaiming it weeks later, a UK VAT-registered importer can declare and recover the same import VAT on the same return — a cash-flow neutral entry. Postponed VAT accounting is available to any business with a UK VAT number and an EORI number importing goods for business use; it is elected on the customs declaration, not applied for separately. For overseas sellers running UK fulfilment, it is usually the difference between a workable margin and a punishing one.
Intermediaries, fiscal representation and who actually files
Non-UK businesses can generally register for UK VAT directly with HMRC; unlike many EU member states, the UK does not impose a blanket fiscal representative requirement on non-resident traders. HMRC retains the discretion to require one in specific cases, and a UK-based tax agent is in practice indispensable for handling correspondence, Making Tax Digital filing software, and bank-related compliance checks.
Online marketplaces carry statutory obligations of their own — they can be made jointly and severally liable for unpaid VAT of overseas sellers on their platforms, which is why due-diligence emails from the large platforms have become so insistent. If a marketplace asks for your UK VAT number, treat the request as a deadline, not a suggestion.
Freight forwarders and customs brokers are not VAT agents. They will clear your goods; they will not file your returns, monitor your thresholds, or notice that your direct-to-consumer channel has crossed into taxable territory.
A short checklist before your next UK sale
- Confirm whether you have, or could be argued to have, a UK fixed establishment.
- Map every UK revenue stream: direct website, each marketplace, app stores, wholesale.
- For each stream, identify who is the supplier for VAT purposes — you or the platform.
- If you hold stock in the UK, register before the first sale ships.
- If you import above £135, secure an EORI number and elect postponed VAT accounting from day one.
- Keep B2B customer VAT numbers on file; they are the evidence that supports reverse-charge treatment.
FAQ
Q: We only have three UK subscribers to our SaaS product. Do we really need to register? A: If those subscribers are consumers or non-VAT-registered businesses, then yes — there is no de minimis for overseas suppliers of digital services to UK consumers. If all three are UK VAT-registered businesses, the reverse charge usually applies and no UK registration is required for those sales.
Q: Our goods ship from China and the marketplace collects VAT. Do we still need a UK VAT number? A: Not for the marketplace sales themselves, provided the marketplace is correctly treated as the deemed supplier. You will still need to register if you hold stock in a UK warehouse, sell direct from your own site to UK consumers, or import consignments above £135 in your own name.
Q: Can we use postponed VAT accounting before our UK VAT registration is finalised? A: No. Postponed VAT accounting requires an active UK VAT number and EORI. Imports made in the interim must pay import VAT at the border, which is recoverable later but only if the paperwork links cleanly to the eventual VAT registration.
Serene Jade's Enterprise Landing team handles UK VAT registration, EORI, postponed VAT accounting setup and ongoing returns for overseas sellers entering the UK market — see our services.