When does a marketplace collect VAT on China stock?
For ordinary consumer orders shipped from China in consignments worth £135 or less, the marketplace normally collects VAT when the goods are sold. Check the whole consignment, stock location and destination, plus any business-customer exception. Cambridge China Bridge can help reconcile China warehouse and dispatch records.
Start with the stock location and destination
For goods held in China at the point of sale, marketplace consumer orders in consignments worth £135 or less normally fall within marketplace VAT collection. For Great Britain, this is supply VAT charged at sale; for Northern Ireland, goods arriving from China fall within import VAT treatment.
Record the destination and actual fulfilment route before listing. If you are still choosing between direct dispatch and importing stock first, read dropshipping versus bulk sourcing. This guide addresses who collects VAT on marketplace sales.
Check the consignment, not each item
The £135 test applies to the total consignment. HMRC uses intrinsic value: the selling price of the goods, excluding separately shown transport or insurance and other identifiable taxes and charges. Transport or insurance included in the price without being separately shown stays within that value.
Ask the warehouse which order lines will travel together, then reconcile them with the marketplace order and invoice. Recheck after additions or combined dispatches. Above £135, normal import VAT and customs rules apply. Our import VAT guide covers the wider import calculation.
Build a stock-location evidence pack
HMRC’s marketplace checks use fulfilment information, seller-provided locations and listing information. Advertised delivery speed can reveal inconsistencies that prompt further questions.
Keep dated warehouse inventories, batch identifiers, order allocation records, dispatch scans and tracking together. Ask the China warehouse to identify where the allocated goods were when sold. Reconcile that evidence with the listing’s dispatch location, including any UK replenishment or returns stock. For ownership and reservation checks, use buying China stock lots.
Separate business purchases and excluded goods
For eligible low-value business purchases, providing a UK VAT registration number changes the treatment: the marketplace does not charge VAT. A business receiving the goods in Great Britain accounts for VAT through the reverse charge; Northern Ireland uses import VAT treatment. Calling an order a business purchase without supplying the VAT number does not establish this exception.
The low-value marketplace import rules exclude consignments containing excise goods and non-commercial goods such as gifts. Ask for separate tax advice before using the ordinary consumer-order workflow for these goods. Also ask the platform to confirm its role if it merely advertises goods or processes payments.
Reassess when stock moves to the UK
China-held and UK-held stock need separate treatment. For consumer sales of stock already in Great Britain, marketplace liability applies to overseas sellers at any goods value. A seller established in the UK remains responsible for VAT on its sales. The overseas seller also remains liable for import VAT and Customs Duty when importing the stock.
Before switching fulfilment locations, ask your accountant and marketplace to confirm the seller’s establishment, stock location and tax treatment. Keep the import documents separate from marketplace sales statements, then reconcile the goods and charges. Cambridge China Bridge’s staff in China can help assemble warehouse and dispatch evidence for that review.
Frequently asked questions
Does a UK seller pay marketplace VAT on China stock?
For eligible consumer consignments worth £135 or less held in China when sold, the marketplace collects VAT. The UK-held stock rule instead depends on whether the seller is established in the UK.
Is the £135 limit per item or per parcel?
It applies to the total imported consignment, not each item. Confirm which goods travel together and reconcile their intrinsic value with the invoice.
What proves my marketplace stock is in China?
Build a consistent trail: dated warehouse inventory, batch identifiers, order allocation and dispatch records. Match it to the listing and tracking. Ask the platform what evidence it needs.
Can a VAT-registered business buy without marketplace VAT?
For eligible China-held consignments worth £135 or less, give the marketplace your UK VAT number. The business accounts for VAT instead, using the reverse charge in Great Britain or import VAT treatment in Northern Ireland.