Quick answer:
A US Shopify store must register for UK VAT from its first sale if it ships consignments worth £135 or less to UK consumers, or if it acts as importer (for example on DDP terms). There is no threshold for non-established sellers. Stores that ship only higher-value consignments where the customer is the importer, or that use a merchant-of-record service, may not need to register.
Why Shopify isn’t Amazon or eBay for VAT purposes
Marketplaces such as Amazon and eBay act as “deemed suppliers” for many cross–border sales into the UK: the marketplace itself collects VAT at checkout and remits it to HMRC, so a US seller trading only through those platforms may not need a UK VAT number for that specific sales channel. Shopify is built differently. It is an e–commerce platform, not a marketplace facilitator, so it does not automatically calculate, charge, or collect UK VAT for the merchant. Responsibility for registering, charging the correct rate, and filing returns sits entirely with the seller running the store.
That distinction matters most for sellers running both channels at once. A US brand selling the same products on Amazon UK and through its own Shopify store can end up VAT–compliant on the marketplace side by default, while the direct-to-consumer Shopify side still has no registration in place – because HMRC treats the two sales channels differently.
The threshold: why “wait and see” doesn’t work
Domestic UK businesses only need to register once turnover passes £90,000. Overseas sellers get no equivalent runway. There is no distance–selling threshold for goods dispatched into the UK from abroad, so a single order shipped to a UK customer can trigger the registration requirement – commonly described as a “nil” or £0 threshold for non-established sellers. Waiting until UK sales “become significant” isn’t a compliance strategy; the obligation exists from the first sale.
How VAT is actually applied at checkout
Once registered, how a Shopify store charges VAT depends on the value of the consignment being shipped:
- Consignments valued at £135 or less: the seller charges 20% UK VAT at the point of sale (unless reduced or zero-rate applies) and must configure Shopify’s tax settings to apply it.
- Consignments valued above £135: normal import rules apply instead – import VAT and any customs duty are collected on arrival from whoever is importer of record. On DAP terms that is usually the customer, via the carrier. If you ship DDP, you are the importer and must register.
Stock held in the UK removes any ambiguity
If a US seller holds inventory inside the UK – its own warehouse, or a third–party fulfilment centre such as Amazon’s FBA UK programme – the £135 rules no longer apply to it. Sales of that stock through Amazon or another marketplace are accounted for by the marketplace; you can register to recover import VAT or apply for exemption. But any UK stock you sell through your own Shopify store is a UK supply, and you must register from the first sale.
FAQ
Does selling only through Amazon UK avoid the need to register?
Possibly, for that channel alone – the marketplace’s deemed-supplier rules can mean Amazon accounts for the VAT on those orders. That doesn’t extend to sales made through the seller’s own Shopify store, which is a separate registration question.
Is there a minimum number of UK sales before registration is required?
No. Non-established sellers have no registration threshold; the requirement applies from the first taxable sale into the UK.
Does holding a small amount of UK stock change anything?
Yes. Any stock physically held in the UK – owned outright or via a fulfilment provider – triggers registration for those goods, regardless of sales volume.
