Exporting to UK - orders under £135 (VAT)

[quarfie]

I am a seller in Canada. Back in 2020 I stopped shipping to UK if the order is under £135 equivalent, because of the then-new requirement that I register for UK VAT and collect and remit the taxes.

Since this would involve quarterly reporting and international remittances for what amounted to a few hundred dollars in profit per year, it was clearly not worth it.

This is obviously very frustrating for a small number of my customers.

Now that this has been going on for a few years, I'm curious about what's happened to small volume sellers who have continued to ship without registering. Do they return the parcels or do they simply bill the recipient as they would with a larger order?

[Rostislav]

HI Quarfie,

We provide UK VAT service for as low as 9.9 EUR per month . We have a lot of SME customers from the US and Canada who use our services. Alternative  to using UK LVC VAT scheme is to send items DDU and you customer is get charged VAT on delivery. If the delivery is postal and it arrives to Royal mail the customer will be charged 8GBP handling fee (for presentation the item to the customs)  and VAT. Courier operators charge bigger handling fees.  The overall delay in delivery due to not having UK VAT collected at the checkout is 3-4 days for postal deliveries , sometimes more (national holiday periods etc.) . So if you intend to maintain high customer satisfaction , it is best to register for UK VAT LVC scheme  

[SoniaOrlova]

Hi Quarfie,

I have encountered the same problem myself. For items valued below £135, my company had to be VAT registered in the UK, which is not financially feasible for me.

These guys - https://apps.shopify.com/duty-refunds - act as a fiscal representative, which means that they are the importer of the product and pay all the taxes + file VAT returns on my behalf. They prepare all of the shipping documents for you, so it really took the headache away. As it says in the name, they also reclaim all of the taxes on your behalf in case of a return.

I also ended up saving £11 per shipment for my DHL express shipments!

It costs me £1 per shipment + 5% from taxes I need to pay to the UK customs. For a £100 shipment I was charged £1.8 on top of the VAT.

The only thing I would note, is that you have to reach out to these guys after installing their plugin, because it doesn't start working automatically.