Guides / Dropshipping to the UK · Updated 30 September 2026

Dropshipping to the UK: who pays duty and import VAT

When an overseas supplier ships straight to your UK customer, the parcel is a UK import. Here is who accounts for VAT and duty, and how delivery terms change the customer's experience.

This guide is also available in Polish.

Why dropshipping into the UK is different

In a dropshipping model the goods never pass through your hands. A supplier outside the UK, for example in an EU country, packs the order and ships it straight to your UK customer. For UK customs and VAT purposes, that parcel is an import into Great Britain, and somebody has to account for VAT and, where it applies, customs duty. Who that somebody is depends on three things: the value of the consignment, whether the sale goes through an online marketplace, and the delivery terms you choose.

This guide walks through each of those in turn, using HMRC guidance only. If you want a narrower look at the threshold itself, see our sibling guide on low-value imports and the £135 VAT rules.

Consignments of £135 or less: VAT at the point of sale

HMRC treats goods sold directly to UK customers from outside the UK differently when the consignment is worth £135 or less. The threshold applies to the value of the whole consignment, not to each item inside it. For these consignments, VAT is not collected as import VAT at the border. Instead it is charged at the point of sale.

If you sell through your own shop

Where you sell from your own website direct to a UK consumer, HMRC's guidance says the seller must account for the VAT on consignments of £135 or less. In practice that means the overseas seller deals with UK VAT, which is why many direct-to-consumer sellers need a UK VAT registration before they start.

The exception is a sale to a UK VAT-registered business that gives you its VAT registration number. In that case the business customer accounts for the VAT itself using the reverse charge on its own VAT return.

If you sell through an online marketplace

When a consignment of £135 or less is sold through an online marketplace to a customer in Great Britain, the marketplace is treated as the supplier for VAT and must charge and account for VAT at the point of sale. The same marketplace liability applies to goods already in the UK sold through the platform by a seller not established in the UK. In that second scenario the overseas seller is still responsible for import VAT and customs duty when the stock is first imported, and its supply to the marketplace is treated as zero-rated.

What about customs duty under £135?

According to gov.uk's guidance for people receiving goods from abroad, there is no customs duty charge in Great Britain on non-excise goods of £135 or less. Excise goods such as alcohol and tobacco are different: duty is charged whatever their value.

Consignments over £135: normal import rules

Above £135, the point-of-sale regime no longer applies. HMRC's guidance states that normal VAT and customs rules apply on importation, and the importer, typically the recipient, is liable for import VAT and customs duty. Duty depends on the type of goods and their origin, so you need the correct commodity code from the UK Trade Tariff. Import VAT is calculated on the total value, including postage, packaging, insurance and any duty owed.

A full import declaration is made in CDS, the system that replaced CHIEF. That is where the question of who the importer is becomes practical rather than theoretical, and our guide to the CDS import declaration and when to use a broker explains the mechanics.

Delivery terms: DAP versus DDP

For consignments over £135, your delivery terms decide who stands in the importer's shoes, and they shape what your customer experiences on the doorstep.

• Delivered at place (DAP): you pay to get the parcel to the customer, but import charges fall on the buyer. Gov.uk explains that Royal Mail, Parcelforce or the courier will contact the recipient if VAT, duty or delivery charges are due, and parcels are normally held for about three weeks before being returned to sender if unpaid.
• Delivered duty paid (DDP): you, as seller, take on the import VAT and duty so the customer pays nothing extra on delivery. To act as importer you need your own customs set-up in the UK, including a GB EORI number.

For a retail brand, a surprise bill on the doorstep often turns into a refused parcel and a refund request. If you choose DAP, say so clearly at checkout. Our guide on Incoterms and who clears customs covers the wider picture, and for a step-by-step look at who pays customs duty when dropshipping to the UK Easy Clearance has a separate article.

EORI and UK VAT registration for overseas sellers

EORI

Gov.uk says a business needs an EORI number to move goods between Great Britain and any other country, and that a business does not have to be established in the UK to get a GB EORI where it carries out qualifying customs activities. If you plan to import on DDP terms, the EORI is the starting point.

UK VAT

HMRC's guidance on overseas goods sold directly to UK customers says overseas sellers must register for UK VAT if the goods are located in the UK at the point of sale, with limited exceptions, such as selling only zero-rated goods, or only to UK VAT-registered businesses with consignments under £135. Separately, sellers accounting for point-of-sale VAT on consignments of £135 or less need to be able to report that VAT to HMRC. Check the current HMRC guidance for your exact model before your first sale.

A practical checklist

• Map each sales channel: own shop, marketplace or B2B.
• Decide who accounts for VAT on consignments of £135 or less for each channel.
• Classify your products and check duty and origin for orders above £135.
• Choose DAP or DDP and state it clearly at checkout.
• Get a GB EORI and UK VAT registration if your model requires them.
• Decide whether you need a customs agent; see do you need a broker?

Related guides

• UK VAT on low-value imports: the £135 rules explained

• Importing coffee into the UK: commodity codes, duty and VAT

• Importing furniture from Poland to the UK: a business guide

Sources

• VAT and overseas goods sold directly to customers in the UK (GOV.UK)
• VAT and overseas goods sold to customers in the UK using online marketplaces (GOV.UK)
• Tax and customs for goods sent from abroad (GOV.UK)
• Get an EORI number (GOV.UK)

General information, not legal, tax or customs advice. Rules change; confirm current requirements on gov.uk or with a registered agent before you ship.