Sellers exporting to the UK should note that e-commerce platforms such as Ebay and Shopify are now responsible for collecting VAT directly from American and Canadian sellers. The new arrangement applies Value Added Tax for all "B2C" online orders from North America to the UK. Sellers are required to register and collect UK VAT for orders* valued up to £135. The value of £135 covers only the value of the goods (i.e. transaction value) and excludes shipping costs.
The success of international cross border e-commerce has led to more stringent rules related to many regulations but most notably VAT. UK sellers have understandably been pushing for a level playing field by insisting that international orders should be subject to VAT. Similarly, European Union has also implement rules regarding payment of VAT prior to import to the EU.
Build your ecommerce sales to the UK by shipping direct from Canada. Contact Jet's team for details
Disclaimer: This post - and all Jet Worldwide online content - is intended for general information only and presented as is with no representations to the content being error free.
A few quick points to consider when shipping international from Canada:
- Canada Post is the preferred option for individuals shipping small parcels and personal items internationally.
- Market dominant carriers, such as UPS, FedEx have crazy high base pricing but discounted shipping can be obtained via resellers who provide "comparison quotes" that offer large discounts but can still be expensive.
- Jet's logistics professionals will personally respond to your inquiry within 1 business day sharing our expertise and helping you find the right solution (we freely recommend alternative carriers and methods that may better suite your needs).
- E-commerce shippers usually need a much lower cost than can be provided by traditional shipping methods and need direct shipping solutions (visit our e-commerce page).
This post provides a deeper dive and explores of the main elements of international shipping from Canada
VAT payment for online orders to the UK shipped from Canada and US
- Shipping platforms (and sellers who do not use an online marketplace) are required by UK Customs to collect VAT for orders shipped to the UK valued under £135.
- For goods valued over £135, the collection will be made from the receiver at the time of import.
- See section below on the Canadian UK Free Trade Continuity Act TCA
VAT Payment from Canadian Seller or Marketplace
The responsibility to charge, collect and report UK VAT is the responsibility of either the online marketplace or -if the seller sells directly to the UK - the seller them self. See definitions below.
The rules for collection apply for goods imported in consignments with a value up to £135. When the intrinsic value of the consignments being imported exceeds £135, then the responsibility to charge, collect and remit UK VAT will be collected at import.
We recommend that online sellers collect VAT for all orders the UK regardless of value so all shipments can be cleared without charges to the consignee.
Package value versus individual orders
The rules related to the collection of VAT apply to the value of the package being sent, not to individual orders or items in the package. If shippers wish to stay below the £135 threshold, they must break up the order into different shipments.
Definitions to Consider When Shipping Online Orders to the UK
UK VAT:The value-added tax (VAT) is collected by all sellers of goods and services at each stage of the supply chain. That means that suppliers, manufacturers, distributors, retailers and end consumers all pay the VAT on their purchases. The standard rate of VAT in the UK is 20% but it can be lower for some goods, such as books.
UK HMRC: VAT is administered and collected by HM Revenue and Customs / HMRC.
OMP: An Online Marketplace / OMP is considered to be any electronic interface that facilitates the sale of goods to a customer such as eBay and Amazon.
Seller: Canadian Online sellers who offer goods directly to British consumers (not via a platform such as eBay) are defined by UK VAT rules as the "seller." Sellers (who are not transacting via an OMP mentioned above) must register for UK VAT with UK HMRC.
UK VAT Registering Agents: UK companies that assist Canadian, American and other non UK sellers to register and administer their VAT with HMRC (mentioned above). Many sellers prefer using UK professionals to manage the complexities of VAT registration and reporting process (such as Kings VAT).
Shipping to UK businesses
The online marketplace must charge and account for VAT at the point of sale, unless the consignment is a business to business sale and the customer has given their UK VAT registration number. If shipping to registered business, the businesses UK VAT registration number must be noted on the invoice. Sellers can verify the businesses UK VAT number using the following website: https://www.gov.uk/check-uk-vat-number.
A sample statement to be included on a shipment purchased by a UK based business: Customer to account for VAT to HMRC: UK business customer: _______
Sellers from Canada are required to keep records to ensure the correct application of VAT.
While the default Value Added Tax is 20%, it is important to note for some specialized sellers that some goods benefit from lower VAT (such as books, food and children's clothes).
EORI Number for UK Imports from Canada
An Economic Operators Registration and Identification number (EORI number) is an identification number for businesses (economic operator) which import or export of goods into or out of UKAn EORI number is part of the data set required for customs entries to the UK
North American sellers should confirm compliance with their platform
Major Canadian and American shipping platforms such as Shopify and BigCommerce have added functionality to facilitate this change. eBay will add VAT for all sales made by non UK based sellers to the UK based on the final sale amount. Sellers can change the default VAT % applied by eBay if, for example, the VAT was already included in their price.
Added VAT and the need for lower delivery cost to the UK
Contact Jet Worldwide’s team to stay informed on our new shipping options to the UK and EU. Having a fully tracking low-cost shipping option to the UK is more important than ever to offset the application of VAT and other costs.
Jet Worldwide has developed low cost direct shipping options to the UK from Canada and the USA. Contact our team for details and to establish best in class shipping solutions for online orders shipped direct to the UK.
Delivery to the UK from Canada via Jet WorldwideJet Worldwide: A trusted brand offering international shipping for over 40 years!
- Jet Worldwide offers options for shipping between the UK and Canada for parcels, pallets, and online orders.
- Jet Worldwide offers transparency and logistics support: JetWorldwide.com/contact
Added VAT: Also required for online orders to the EU
Shipments to the EU are subject to the similar "duty free but with VAT" status for online orders shipped to the European Union.
Shipping American and Canadian Shopify Orders to the UK and the EU
Jet Worldwide has best in class international shipping solutions for Canada's leading e-commerce platforms.
UK Canada Free Trade Continuity
The Canada-U.K. TCA provides Canadian and UK businesses preferential access for goods shipped between both countries.
See sample form to declaration of origin (Fillable PDF to download). Note that while the regulations do not mandate a specific format. It is recommended also including to include a certification statement on the invoice to ensure preferential duty free consideration at time of import.
Getting a quote for shipping between the UK and Canada
Jet Worldwide gives access to all companies seeking for spot quotes from Canada to the UK for parcels pallets, and online orders.