UK VAT Guide: Selling DDP After Brexit

Selling DDP in the UK after Brexit: what changes?

When goods move from the EU to Great Britain, the transaction now involves customs. If you sell DDP, you generally deliver the goods with import duties, import VAT and customs formalities handled on your side. Working with a fiscal representative in the United Kingdom allows non-established sellers to handle the importer-of-record role and UK VAT compliance efficiently.

Before shipping, define the importer of record, the GB VAT registration position, who accounts for import VAT and whether UK VAT must be charged on the sale.

• DDP is a delivery promise and a tax position.
• The seller often bears import costs, customs risk and UK VAT reporting.
• The carrier and customs broker must receive instructions before the goods move.

UK VAT rates

The UK standard VAT rate is 20%. It applies to most goods and services sold in the UK.

The reduced VAT rate is 5%. It applies to specific categories, such as certain fuel and energy supplies. The zero rate is 0% for specific goods such as most food, books, newspapers, public transport, prescribed medicines and children’s clothing.

When should you charge UK VAT?

DDP sales can trigger UK VAT when the seller remains responsible for importing the goods and selling them on UK territory. Stock held in the UK, local resale, goods with installation and ecommerce flows also require attention.

For imported consignments worth 135 GBP or less, UK rules can make VAT due at the point of sale. Above that threshold, the analysis depends on the Incoterm, importer and sales flow.

GB VAT number and registration

A foreign company may need UK VAT registration when it sells goods DDP, stores goods in the UK, sells marketplace or ecommerce parcels up to 135 GBP, buys and resells locally or acts as importer before a taxable UK supply.

Registration can be handled through HMRC or a UK tax agent. Usual timing is around 4-6 weeks, but HMRC delays have reached 8-9 weeks in some periods. Full details on UK VAT rates, thresholds and registration conditions are in the VAT in the United Kingdom guide.

• Company registration extract.
• Articles of association.
• Director ID.
• VAT taxable-person certificate from the country of establishment.
• Description of the UK business flow.

EORI GB and customs documents

You need an EORI GB to identify the business in UK customs declarations. Without it, the broker or carrier may be unable to lodge the import declaration correctly. The full import documents checklist for the United Kingdom covers EORI, C88/E2 entry certificates and supplementary declarations.

• Commercial invoice.
• Importer of record.
• Commodity code.
• Customs value.
• Country of origin.
• Incoterm DDP.
• Proof of preferential origin where applicable.

Customs duties and rules of origin

The EU-UK Trade and Cooperation Agreement can remove customs duties for goods of preferential EU origin, but shipped from the EU does not automatically mean duty-free. The full VAT rules in the United Kingdom article explains how these rules interact with UK VAT obligations.

Goods manufactured in China and then stored in France do not become EU-origin merely because they were warehoused in the EU. Check the product, commodity code and supplier evidence.

PIVA and UK VAT returns

PIVA means Postponed Import VAT Accounting. It allows a UK VAT-registered importer to account for import VAT on the VAT return instead of paying it upfront at customs. Learn how to import goods into the UK without paying VAT upfront.

VAT returns are submitted through HMRC online systems using Making Tax Digital compatible software. Quarterly filing is common, but the frequency must be confirmed in the HMRC account.

Northern Ireland and the XI exception

Great Britain and Northern Ireland are not always treated the same way. Northern Ireland has a special status for goods, and XI VAT numbers may apply in certain intra-EU goods flows.

Treat Northern Ireland separately from England, Scotland and Wales when designing the UK sales model.