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 add Tax for all "B2C" online orders from North America to the UK. Sellers must register and collect UK VAT for orders* with a value 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 means more stringent rules and 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.
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A few quick points to consider when shipping international from Canada:
- Canada Post is the best option for individuals shipping small parcels and personal items internationally.
- Market dominant carriers, such as UPS, FedEx have high base pricing but discounts are available directly or via partners. Resellers provide "comparison quotes".
- Build best in class lowest cost shipping solutions direct to the UK with Jet's logistics team.
- E-commerce shippers usually need a much lower cost than can via traditional shipping methods.
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 shipping from Canada and US
- Shipping platforms (and sellers who do not use an online marketplace) must collect VAT for orders shipping to the UK with a value under £135.
- For goods with a value 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
Consolidate your orders. Ship regular consolidations to the UK. Benefit from consolidation import for the entire consignment. Consolidate payment of VAT and duty at time of import. Delivery within 48 hours of clearance. No charges to the consignee. Full tracking and support from DPD UK and Jet Worldwide Canada.
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 in consignments with a value up to £135. When the intrinsic value of the consignments exceeds £135, collection and remittance of UK VAT will is at time of import.
We recommend that online sellers collect VAT for all orders the UK regardless of value so all shipments can deliver without charges to the consignee.
Access DPD Delivery to the UK from Canada and USA
DPD UK is a courier company in the United Kingdom and a leading international parcel delivery network across Europe. Access DPD UK's full range of last mile delivery with import processes direct from Canada and North America. Contact our logistics team.
Download accompanying PDF
Package value versus individual orders
The rules for collection of VAT apply to the value of the package,, not to individual orders 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-add tax (VAT) collection is via sellers 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.
READ MORE: HOW TO VALUE GOODS shipping TO THE UK
UK HMRC: VAT is via HM Revenue and Customs / HMRC.
OMP: An Online Marketplace / OMP is the 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) the "seller." Sellers (who are not transacting via an OMP) must register for UK VAT with UK HMRC.
Read more: VAT prepayment for Online Orders to the UK
UK VAT Registering Agents: UK companies that assist Canadian, American and other non UK sellers to register and administer their VAT with HMRC (see above). Many sellers prefer using UK professionals to manage the complexities of VAT registration and reporting process (such as Kings VAT).
Read More: Understanding the difference between duty and 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 a business, the businesses UK VAT registration number must be 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 with the shipment to a UK business: Customer to account for VAT to HMRC: UK business customer: _______
Sellers from Canada must keep records to ensure the correct application of VAT.
While the default Value add Tax is 20%, note that some goods benefit from lower VAT (such as books, food and children's clothes).
READ MORE: IMPORT DUTIES AND CALCULATION.
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 necessaryfor 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 add functionality to facilitate this change. eBay will add VAT for all sales made by non UK sellers to the UK on the final sale amount. Sellers can change the default VAT % apply by eBay if, for example, the VAT was already in the price.
add VAT and the need for lower delivery cost to the UK
Contact Jet Worldwide’s team for innovative shipping options to the UK and EU. Full tracking and lowest-cost shipping option to the UK is more important than ever to offset the application of VAT and other costs.
Delivery to the UK from Canada via Jet Worldwide
Jet Worldwide: Offering best in class 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
add 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 shipping to the European Union.
READ MORE: UNDERSTANDING THE DIFFERENCE BETWEEN VAT AND IMPORT DUTY
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 shipping 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.
READ MORE: CERTIFICATE OF ORIGIN AND WHY IT IS NEEDED.
Getting a quote for shipping between the UK and Canadaa
Jet Worldwide gives access to all companies seeking for spot quotes from Canada to the UK for parcels pallets, and online orders.
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