This guide is for e-commerce companies that sell online via web stores or at marketplaces.
VAT Standard rate
The standard VAT rate in the United Kingdom in 2022 is 20%.
VAT Reduced rate
Some goods and services, for examples children’s car seats, mobility aids for the elderly, smoking cessation products – nicotine patches and gum.
Equipment for disabled people;
Sanitary protection products;
Low vision aids.
As the UK left the EU distant sales threshold is no longer applies to distant sales to the UK. The exemption is sales between Northern Ireland and the EU. Distant sales threshold is £70,000 for goods sold from The EU to Northern Ireland customers.
As the UK left the EU distant sales threshold no longer applies to distant sales to the UK. The exemption that exists for goods between Northern Ireland and the EU doesn’t include sales of services. That means that for non-UK businesses VAT registration obligation starts from the first B2C sale.
For UK-based businesses, there is a local sales threshold of £85,000. That threshold is only applicable for UK established businesses selling to UK customers.
If goods or services were used to make taxable supplies in the UK, VAT in input invoices might be credited. For example:
- VAT paid at custom clearance with your EORI number
- VAT paid to the UK suppliers
You may be able to reclaim VAT paid on goods or services bought before you registered for VAT if the purchases were made within certain time limits.