Tom,
Shopify will do this automatically if you have Registration based tax settings switched on.
Get on to support and ask them to help you activate this..
More details here..
https://help.shopify.com/en/manual/taxes/registration
Regards,
Topic summary
EU-based sellers are struggling to implement the UK’s £135 threshold rule for post-Brexit VAT collection. The core issue: Shopify cannot automatically adjust VAT charges based on order value and currency fluctuations.
The £135 Rule:
- Below £135: Sellers must charge 20% UK VAT at checkout, register for UK VAT, and remit collected taxes to HMRC
- Above £135: Sellers can make customers pay import VAT and duty upon delivery instead
Technical Challenges:
- Shopify only allows enabling or excluding UK VAT globally, not conditionally based on order value
- Currency conversion between EUR/USD and GBP complicates threshold calculations
- No native reporting exists to separate sales above/below £135 for compliance
Key Clarifications Provided:
- The threshold applies to B2C only; B2B customers can be importers of record regardless of value
- For orders above £135, if sellers charge VAT anyway, they must still register and report to HMRC
- Some sellers find orders above £135 barely profitable due to 12% import costs under DDP shipping
Current Status: The discussion remains unresolved. Multiple users seek workarounds or third-party apps, as Shopify’s “Registration based tax settings” don’t fully address the conditional VAT calculation requirement.