If you're not established in the UK, there's no VAT threshold
UK-based businesses only register for VAT once they pass a turnover threshold (£90,000). Overseas businesses do not get that cushion. HMRC's guidance is explicit: if you are a Non-Established Taxable Person and you make any taxable supplies in the UK, "regardless of their value", you must register for VAT. In practice, that usually means registering before your first taxable UK sale, not after hitting a number.
You are an NETP if you have no UK establishment — broadly, no place where your essential management happens, and no permanent staffed premises of your own in the UK. HMRC states plainly that "a registered, serviced or virtual office alone is not enough" to create one.
Does using a UK fulfilment centre make you "established"?
A question we get constantly. As a general position, holding your stock with a third-party fulfilment partner is not, by itself, treated as giving your business a UK establishment — the test looks at where your management sits and whether you have your own staffed premises here, not at where your inventory is stored. But establishment is fact-specific, so treat that as the general rule and confirm your own status with a VAT adviser.
Here's the catch that matters more: even without a UK establishment, once your goods are located in the UK when they sell, you must register and account for UK VAT on those sales anyway (see below). So holding UK stock brings a VAT-registration obligation whether or not you're "established" — that's the point most brands miss.
The £135 rule (for direct sales)
For goods sold directly to UK consumers (not through a marketplace) in consignments valued £135 or less, where the goods are outside the UK at the point of sale, you register for UK VAT and charge it at the point of sale rather than paying import VAT at the border. The £135 is measured on the whole consignment's value, not per item. Above £135, normal import VAT and customs rules apply on the way in instead.
If your goods are already in the UK at the point of sale — UK-held stock, any value — the £135 test doesn't apply: you register and account for VAT on all such direct sales.
Two different "£135s" — and one is changing
This trips people up, so it's worth being precise. There are two separate rules that share the number £135:
- The VAT point-of-sale rule above — for how VAT is collected on low-value consignments.
- A customs duty relief — low-value imports (£135 or less) have been free of customs duty.
As of July 2026, the VAT rule is unchanged, but the customs duty relief is being removed: the government's response of 13 July 2026 confirmed the £135 duty relief will go, coming into force "by October 2028 at the latest". Because policy here is actively moving — this reform, plus a parallel one in the EU — treat the specifics as a snapshot and confirm the current position before you rely on it.
Selling through a marketplace
Sell through an online marketplace (Amazon and the like) and the rules shift the VAT job onto the marketplace in two cases: goods of £135 or less outside the UK at the point of sale, and goods of any value already in the UK sold by an overseas business. In both, the marketplace is the "deemed supplier" and accounts for the UK VAT — not you.
Two things to hold onto: you remain liable for import VAT and customs duty when your goods are first imported into the UK (e.g. into a warehouse), even where the marketplace later handles the sales VAT; and the moment you make any standard-rated supply the marketplace doesn't cover — direct sales alongside your marketplace listings, for instance — your own registration obligation kicks in.
Frequently Asked Questions
Do overseas sellers have a UK VAT threshold?
No. If you have no UK establishment you are a Non-Established Taxable Person, and HMRC's guidance states the registration threshold does not apply — you must register if you make any taxable UK supplies regardless of their value. In practice that usually means registering before your first taxable UK sale. This differs sharply from UK-established businesses, which only register above £90,000 turnover.
What is the £135 rule for UK VAT?
For goods sold directly to UK consumers in consignments of £135 or less that are outside the UK at the point of sale, the seller registers for UK VAT and charges it at the point of sale, rather than import VAT being charged at the border. Above £135, normal import VAT and customs apply. If the goods are already in the UK when sold, you account for VAT on all such sales regardless of value.
Does storing stock in a UK fulfilment centre make my business UK-established for VAT?
As a general position, no — the establishment test looks at where your management is and whether you have your own staffed UK premises, not where your stock is held. But it is fact-specific, so confirm your status with a VAT adviser. Either way, holding stock in the UK triggers a VAT-registration obligation on sales of that UK-located stock, independent of the establishment question.
If I sell on Amazon UK, who accounts for the VAT?
In two common cases the marketplace does: goods of £135 or less located outside the UK at the point of sale, and goods of any value already in the UK sold by an overseas business. The marketplace is the deemed supplier for the VAT on those sales. You still remain liable for import VAT and customs duty when the goods first enter the UK, and for VAT on any sales the marketplace doesn't cover.
Is UK VAT for overseas sellers changing in 2026?
The area is under active reform. The customs duty relief on low-value imports (£135 or less) is being removed, coming into force by October 2028 at the latest per the government's July 2026 response, and there is parallel change in the EU. The core VAT point-of-sale rules were unchanged as of July 2026, but given the pace of policy here, confirm the current position and take professional advice before relying on any specific figure.