How can I set my online store to reflect non-VAT registration in the UK?

Accounting & Taxes

Topic summary

UK merchants not registered for VAT want invoices that do not show VAT. The practical setup shared by a user and confirmed by others works:

  • Settings > Billing > Tax registration > select “I’m not VAT registered,” Save.
  • Settings > Taxes > Tax regions: ensure all regions show “Not collecting” (for UK, adjust the default 20% to 0% if prompted, then Save so it reflects not collecting).
  • Uncheck “Show all prices with tax included.”
  • On products, leave “Charge tax on this product” disabled while you’re not collecting tax.

Guidance/clarifications from Shopify staff:

  • UK VAT registration is only mandatory once VAT‑taxable turnover exceeds £85,000 (per HMRC). If below, you generally shouldn’t enable VAT collection.
  • Customers in the UK/EU will only be charged VAT if taxes are enabled for those regions. For overseas markets and shipping, charge taxes (including on shipping rates) only if local laws require it; consult official resources or a tax professional.

Resources shared: HMRC VAT registration rules and exporting guidance; Shopify tax setup guides; a UK tax forum thread. Multiple users confirmed the settings resolved invoice accuracy. Discussion remains informational with case-by-case obligations; no single official resolution beyond configuration and references.

Summarized with AI on January 19. AI used: gpt-5.
18

Thanks for all the advice, I’m too in the UK and nowhere near the VAT threshold. I’ve set up my tax settings as above but what should I do with the ‘Charge tax on this product’ option on my products?

Actually, I’ve read Victor’s link and now I’m confused again. I’m not sure what to do with the ‘Show all prices with tax included’ box either..? All countries are listed as ‘not collecting’ in my settings.

Sorry, not good at this stuff.