About the VAT collection system for selling to the UK with Shopify

Due to the changes in the tax system following the UK's exit from the EU, there is now an obligation to collect VAT on orders under £135 for sales to the UK using Shopify. This article will explain the background and current status of this system change.

【System Details】

• Target Area: United Kingdom (UK)
• Target Orders: Orders under £135
• System Details: Obligation for sellers to collect VAT

【Tax System Changes Due to Brexit】

As a result of the UK's exit from the EU, sellers are now required to collect and pay VAT at the point of sale for goods valued at £135 or less.

• Target Amount: Goods valued at £135 or less (excluding shipping)
• Tax Obligation: Sellers (site operators) have a VAT tax obligation for sales to overseas customers.
• Necessary Procedures: It is necessary to register for VAT in the UK and carry out the appropriate tax payment procedures.

You need to determine whether you need to charge tax yourself. If you have any questions, please consult your local tax authority or a tax professional.

Quoted from Shopify

You need to determine whether you need to charge tax yourself. If you have any questions, please consult your local tax authority or a local tax professional. Generally, if you are selling to EU member states, you will need to register with your home tax authority to charge EU VAT. If your sales to customers in the UK exceed £85,000 over a 12-month period, you will typically need to register to charge UK VAT.

Shopify's official documentation is here

Currently, it is possible to set up VAT collection on the Shopify side.

If you need more complex controls, such as restricting orders under £135, it may be difficult to handle with Shopify's standard features, so the use of third-party apps will be necessary.

The collection of VAT on orders under £135 for the UK is an important system change following Brexit.

Basic handling is possible with Shopify's standard features, but if there are more complex requirements, it will be necessary to use apps or custom development.

If you have any questions or concerns about cross-border sales on Shopify, please feel free to contact GO RIDE.