Buying on marketplaces with a UK VAT number
Providing a UK VAT number changes who accounts for VAT. For overseas consignments of £135 or less supplied to Great Britain, the business buyer uses the reverse charge. For UK-held stock sold by an overseas seller, the seller accounts for VAT instead. Discuss your sourcing and stock route with Cambridge China Bridge.
Check the stock location before checkout
Ask where the goods are physically located when sold, where they will be delivered and who the seller is. For stock already in the UK, check whether the seller is established overseas or in the UK. HMRC says a UK-established seller remains liable for VAT on its UK-held goods. For returned stock, see VAT on UK warehouse resales.
Give the marketplace your business’s UK VAT registration number and ask it to confirm that the number has been accepted for the purchase. HMRC provides an online checking service. Keep the confirmation with your order rather than relying on a VAT number saved in your account profile.
Overseas consignments: the buyer accounts for VAT
For goods outside the UK when sold, in consignments valued at £135 or less, the marketplace does not charge and account for VAT when the business customer provides its UK VAT number. For delivery to Great Britain, the buyer accounts for any VAT due on its VAT Return using the reverse charge. This changes the accounting responsibility; it does not make the purchase VAT-exempt. For separately purchased services, see reverse-charge VAT on sourcing agent fees.
The threshold applies to the whole consignment, rather than each item. Above £135, normal import VAT and customs rules apply. Ask for the planned consignment value and packing arrangement before paying. Use our import duty and VAT guide for the wider import calculation.
UK-held stock: the overseas seller accounts for VAT
For goods already in the UK when sold by an overseas seller, the marketplace normally accounts for VAT on sales of any value. When a business customer supplies its UK VAT number, the marketplace should pass the sale details and number to the seller. The seller must register for VAT if necessary and account for any VAT due on the sale.
Do not apply the overseas low-value reverse charge simply because the seller is Chinese. Ask the seller to confirm the VAT treatment and arrange the appropriate invoice before payment. The overseas seller remains liable for import VAT and Customs Duty when it first imports the stock. For separate checks on the stock itself, read buying China stock lots. For helmet purchases, see our guide to VAT on bicycle and motorcycle helmets. For book purchases, see VAT on books and activity books.
Northern Ireland needs a separate check
For a VAT-registered business in Northern Ireland receiving an overseas consignment of £135 or less from outside the EU, HMRC describes import VAT accounting rather than the Great Britain reverse charge. The buyer may use postponed VAT accounting or another means of paying import VAT. In either destination, input tax recovery remains subject to normal recovery rules.
Put the actual delivery destination in your purchasing brief. Ask your accountant to confirm the treatment before approving checkout, particularly when a marketplace account serves both Great Britain and Northern Ireland. For import payment arrangements, see agree import VAT payment before shipment. For subsequent stock movements, see VAT on unsold stock moved from NI to GB.
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Keep an order file your accountant can use
Keep the order confirmation, accepted VAT number, seller identity, stock-location confirmation, consignment information and invoice together. For the Great Britain overseas low-value route, ask for an invoice note identifying the reverse charge. HMRC guidance gives the example ‘reverse charge: customer to account for VAT to HMRC’.
If checkout still charges VAT after accepting your number, ask the marketplace to explain which stock route it has applied before you pay. If the invoice and order details disagree, request clarification and correction rather than assuming your accountant can reclaim the charge. Cambridge China Bridge’s staff in China can help reconcile supplier and dispatch information for the purchasing brief.
Frequently asked questions
Does giving a marketplace my VAT number make goods VAT-free?
No. For qualifying overseas low-value purchases delivered to Great Britain, you account for VAT using the reverse charge. For UK-held stock from an overseas seller, the seller accounts for any VAT due.
Does the £135 limit apply to each item?
No. It applies to the total imported consignment. Ask how the goods will be packed and dispatched before relying on an individual item’s price.
Who accounts for VAT on Chinese goods already in a UK warehouse?
If an overseas seller sells them to your business and you provide your UK VAT number, the seller accounts for any VAT due. Ask the marketplace to pass your number and sale details to that seller.
Can I use the same reverse charge for Northern Ireland?
For qualifying overseas consignments from outside the EU, HMRC describes import VAT accounting for Northern Ireland. Ask your accountant about postponed VAT accounting or another import VAT payment method.