UK Small Business - Do I charge tax on product?

4 0 1



I joined Shopify recently and haven't launched my website yet. I have had a small business online over Instagram which was going relatively well so I decided to open a Shopify website. I have many domestic (UK) customers, but a lot more international (especially US & Europe).


Context: This doesn’t concern dropshipping. I hand-make products in the UK and sell them as a side job.


I have created drafts of products I want to sell, however, one topic I just can't get my head around.


“Charge tax on this product"

What exactly does that mean?


I am aware there are two types of taxes:


1. Income tax which is dealt through Self Assessment etc., I have registered for self-employed etc. so that is sorted.
2. Sales tax, such as VAT. I don't make nearly enough to be eligible for VAT so that's out of the question from my understanding.


What does that product tax on the checkbox refer to, then?

Do I need to charge tax on product or not?

Is there something I am missing?

What do I do about my UK and international  customers?

Reply 1 (1)

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Hello MariaUK,

I'm not thoroughly familiar with how taxes work in other countries, but I don't think you are required to tax your product when selling something hand-made. I also think this link may help.