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Prepared by Eurofiscalis International VAT firm
Document for Brindor Demonstration document · anonymised example
Anonymised example · demonstration

UK VAT Rules

Mapping of UK VAT flows and obligations for Brindor's sales — homeware and decoration items shipped from France to the UK, both B2C (direct site) and B2B (resellers).

01Client overview

Brindor French company · homeware & decoration · VAT establishment in France

A French homeware and decoration company that ships all of its goods from France to the UK market. Two distinct channels: B2C via the direct site brindor.com (sales to UK private consumers, with no intermediary marketplace) and B2B (multi-brand resellers, department stores, UK retail partners).

Established in FR UK outside the EU since 2021 B2C own site B2B UK resellers Flows exclusively FR → UK
Today

Import VAT paid as a cost

Brindor pays import VAT to its carrier without being able to reclaim it. The amount is booked as an expense — a direct loss on the margin of every shipment.

With UK VAT registration

Import VAT postponed via PIVA

Import VAT is reported on the quarterly VAT return with no cash advance and no tax loss. UK compliance consolidated.

02VAT flows · by shipment value and incoterm

Since the UK left the EU on 1 January 2021, intra-Community supplies to the United Kingdom are no longer possible. Every sale is now an export on the French side — and the UK VAT treatment depends on two variables: the intrinsic value of the shipment (£135 threshold per parcel) and the incoterm chosen (DAP or DDP). The £135 rule applies only to B2C; above the threshold or for B2B, UK VAT depends solely on who clears customs.

Flow VAT treatment On the invoice Declaration
B2CSales to final consumersbrindor.com site — UK private individuals
Yes UK VAT registration mandatory — with no turnover threshold
AB2C ≤ £135 — Brindor site Low value · direct sale, no marketplace UK VAT 20% at point of sale
  • Brindor liable for UK VAT with no turnover threshold
  • No import VAT at the border
  • UK VAT registration mandatory before the 1st sale
 Wording on invoice / receipt
  • Price incl. VAT in GBP with UK VAT 20%
  • Break down net base + VAT + gross total
  • Brindor's UK VAT registration number (GB...)
  • Wording “VAT charged at UK standard rate”
  • MTDMaking Tax Digital · quarterly filing · UK VAT return
  • CA3Line E1 “Exports outside the EU” (FR side, outbound net export sale)
B2C For parcels > £135 — choose the incoterm one OR the other
Yes UK VAT registration required
BB2C > £135 under DDP DDP option · Brindor is the importer
VAT treatment Import PIVA + local UK sale 20%
On the invoice / receipt
  • Price incl. VAT in GBP with UK VAT 20%
  • Brindor UK VAT registration number + GB EORI
  • Wording “Import handled by seller — duty & VAT paid”
  • Keep the CDS import record + carrier invoice
Declaration
  • MTDQuarterly UK VAT return · output VAT + import VAT via PIVA (boxes 1 · 4 · 7)
  • PIVAMonthly HMRC statement to download to support boxes 1 and 4
  • CA3Line E1 “Exports outside the EU” (FR departure)
No UK VAT registration not required
CB2C > £135 under DAP DAP option · customer is the importer
VAT treatment Net export sale · no UK registration
  • The consumer is the importer of record
  • Pays VAT + duties + handling fees to the carrier
  • Brindor needs no UK VAT for this flow
Mandatory wording

“VAT exempt — Art. 262 I French Tax Code (CGI)”

“Exemption — Art. 146(1)(a) Directive 2006/112/EC”

  • Keep the export SAD + proof of exit (BAE / EX-A)
  • Degraded customer experience: frequent returns, delivery refusals
Declaration
  • CA3Line E1 “Exports outside the EU”
  • MTDNot applicable if Brindor is not UK-registered
B2B Sales to UK resellers — choose the incoterm one OR the other · department stores, multi-brand, retail partners
Yes UK VAT registration required
DB2B under DDP DDP option · Brindor is the importer
VAT treatment Import PIVA + local UK sale 20%
  • No UK reverse charge on goods — UK VAT 20% must be charged
  • PIVA recommended (neutralises cash at customs)
On the invoice
  • Net price + UK VAT 20% + gross total in GBP
  • Brindor UK VAT registration number (GB...) + the reseller customer's UK VAT number
  • No reverse-charge wording (no such mechanism for goods in the UK)
Declaration
  • MTDUK VAT return · boxes 1 · 4 · 6 · 7
  • PIVAMonthly HMRC statement
  • CA3Line E1 “Exports outside the EU”
No UK VAT registration not required
EB2B under DAP DAP option · UK reseller is the importer
VAT treatment Export outside the EU · exempt
  • The UK reseller is the importer of record
  • Net invoicing by Brindor · no UK registration required for this flow
Mandatory wording

“VAT exempt — Art. 262 I French Tax Code (CGI)”

“Exemption — Art. 146(1)(a) Directive 2006/112/EC”

  • Keep the FR export SAD + proof of exit
  • Reseller's UK VAT (if provided — not required for the FR-side exemption)
Declaration
  • CA3Line E1 “Exports outside the EU”
  • MTDNot applicable if Brindor only operates this flow on the UK side

03Selling under DAP or DDP · facts and implications

The choice between DAP and DDP determines who clears customs in the UK, and therefore all the UK VAT obligations that follow: registration, MTD filing, PIVA, invoice wording, delivery experience.

DAP

Delivered At Place

Brindor invoices net from France. The UK customer is the importer and pays VAT + duties + handling fees to the carrier on delivery.

Implications for Brindor
  • No UK VAT registration required for flows > £135 (B2C and B2B)
  • No MTD filing if Brindor only operates this flow on the UK side
Caution — a rule independent of the incoterm: UK VAT registration remains mandatory for all B2C flows ≤ £135 sold off-marketplace, even under DAP. The choice of incoterm does not exempt Brindor from this obligation for parcels below the threshold.
Implications for the customer
  • The UK customer pays VAT + duties + carrier handling fees on delivery (amount varies with the parcel value)
  • Risk of abandonment or delivery refusal if the customer does not expect the charges
DDP

Delivered Duty Paid

Brindor is the importer in the UK, pays import VAT (via PIVA), then invoices the local UK sale with UK VAT 20% included in the price.

Implications for Brindor
  • UK VAT registration mandatory before the 1st shipment (6–8 week lead time)
  • GB EORI to apply for in parallel
  • Quarterly MTD filing via HMRC-certified software
  • PIVA available simply by opting in with the freight forwarder, to avoid advancing customs VAT
Implications for the customer
  • The customer pays an all-inclusive price at checkout, nothing to pay on delivery
  • Price shown incl. VAT in GBP with UK VAT 20%

04Points of attention

AB2C ≤ £135 direct site

UK VAT registration mandatory from the 1st shipment

As soon as Brindor sells a parcel ≤ £135 directly to a UK consumer, it must be UK VAT registered, with no turnover threshold whatsoever. Allow 6 to 8 weeks to obtain the UK VAT number from HMRC: to be anticipated before any launch.

BB2C DDP DB2B DDP

PIVA — optional but strongly recommended

To benefit from PIVA, you simply ask the freight forwarder (or carrier) to tick the PIVA box at customs clearance. Import VAT is then postponed on the VAT return instead of being paid in cash at customs — no cash advance. No prior authorisation from HMRC is needed: you just need a UK VAT number and a GB EORI, and to give them to the forwarder.

Specific caseCalculating the intrinsic value ≤ £135

The £135 threshold is assessed per shipment, not per item

The intrinsic value used for the £135 threshold is the net sale price of the goods in the parcel, excluding transport, insurance and duties — provided these items are invoiced separately. If they are included in the unit price of the items, they count towards the calculation. The threshold is assessed per shipment: a parcel containing two items at £80 and £70 = £150 → exceeds the threshold, switching to flow B (DDP > £135) or C (DAP > £135). Reference: VAT Notice “Changes to VAT treatment of overseas goods sold to customers from 1 January 2021”.

ComponentIncluded in the calculation?
Net price of the parcel's itemsYes
Transport costs invoiced separatelyNo
Transport costs included in the item priceYes
Insurance invoiced separatelyNo
Customs duties and other taxesNo
Cross-cuttingHMRC compliance

MTD — UK VAT return via HMRC-certified software

Since April 2022, the UK VAT return must be filed via HMRC-certified software (the Making Tax Digital regime). No more manual entry on the portal. If Eurofiscalis handles Brindor's UK VAT return, we are equipped with certified software and take care of everything: keeping the digital records and filing quarterly.

05Glossary — acronyms & concepts

Definitions of the terms used. Every acronym underlined with a dotted line in the document links here.

CDS — Customs Declaration Service
The UK customs IT system. All UK import and export declarations have gone through it since 2022. It is in this declaration that the freight forwarder ticks the PIVA option.
CGI — French Tax Code (Code Général des Impôts)
The code that gathers all French tax rules. Article 262 I is the one that exempts exports outside the EU from French VAT — it applies to all Brindor sales from France to the UK. Available on Légifrance.
DAP — Delivered At Place (Incoterm 2020)
An international trade rule (incoterm) stating that the seller delivers the goods to the destination country, but the buyer handles customs clearance. In practice, the customer pays VAT and duties to the carrier on delivery.
SAD — Single Administrative Document (FR: DAU)
The French export customs declaration that Brindor completes for each shipment to the UK. This document, stamped by customs (with the BAE or EX-A as proof of exit), proves the goods have actually left the EU and supports the French VAT exemption.
DDP — Delivered Duty Paid (Incoterm 2020)
An international trade rule (incoterm) stating that the seller takes care of everything up to the customer: transport, customs clearance, import VAT, customs duties. The customer receives the goods with nothing more to pay on delivery.
GB EORI — Economic Operator Registration UK
An identification number that every business carrying out customs operations in the United Kingdom must have (format GB + digits). To be requested from HMRC at the same time as the UK VAT number.
HMRC — His Majesty's Revenue and Customs
The UK tax and customs authority. It issues UK VAT numbers, receives the quarterly returns and publishes the official guidance (VAT Notices). The UK equivalent of the French tax authority and customs combined.
Importer of Record (IOR)
The person or company listed as the importer on the customs declaration. They must pay the import VAT and the customs duties. Under DDP it is Brindor. Under DAP it is the UK customer.
Self-supply (FR: LASM — Livraison À Soi-Même)
A French mechanism requiring VAT to be repaid when goods are given away free above a certain threshold (for example a gift over €73 incl. VAT). In the UK the logic differs: the threshold is £50 net per recipient per year for business gifts.
ICS — Intra-Community Supply (FR: LIC)
A sale of goods between two businesses in different EU countries, exempt from VAT in the country of departure. No longer applies to sales to the UK since Brexit (1 January 2021): these are now genuine exports outside the EU.
MTD — Making Tax Digital (HMRC filing regime)
A UK programme required since April 2022 for all UK VAT-registered businesses. The return must be filed via HMRC-certified software, with no more manual entry on a portal. Reference: VAT Notice 700/22.
OMP — Online Marketplace
A third-party platform that hosts the sale between a seller and a final consumer (Amazon, eBay, Farfetch, etc.). For parcels ≤ £135 sold via one of these platforms, the platform collects UK VAT instead of the seller. As Brindor sells on its own site, this regime does not apply — Brindor is itself liable.
PIVA — Postponed Import VAT Accounting
A mechanism that lets a UK VAT-registered business account for import VAT directly on its quarterly return, instead of paying it in cash at customs. No prior request to HMRC: the freight forwarder simply ticks the option at customs clearance. Reference: gov.uk — Check when to account for import VAT.
UK reverse charge
In the EU, the reverse charge lets a foreign seller invoice net to a local business buyer (Article 194 of the VAT Directive). The UK has no such equivalent for goods. Consequence for Brindor: under DDP B2B, it must always charge UK VAT 20% to its reseller, with no alternative.
VATA 1994 — Value Added Tax Act 1994
The UK law that defines all UK VAT rules. Amended at Brexit (instrument SI 2020/1495) to incorporate the ≤ £135 parcel regime (low value goods). Available on legislation.gov.uk.
Intrinsic value
The value to compare against the £135 threshold: the net sale price of the items in the parcel, excluding transport, insurance and taxes — provided they are invoiced separately. Calculated per shipment (per parcel). From £135.01, the parcel switches to the standard import regime.

06Sources & references

Official texts used to build this brief. Direct links to HMRC, gov.uk, legislation.gov.uk, Légifrance and eur-lex.

UK VAT legislation

HMRC guidance — VAT Notices

French Tax Code (CGI)

  • CGI — full table on Légifrance
  • Art. 262 I Exemption of exports outside the EU
  • Art. 242 nonies A Mandatory invoice wording
  • Art. 28-00 A Annex IV Low-value gifts FR (€73 incl. VAT)
  • Art. L102 B LPF Record retention, 6 years

EU VAT Directive

Customs & Incoterms

Eurofiscalis resources