Here is an illustrative founder question: "We are an Australian supplement brand doing $14m a year and we want to launch properly in the UK. Our own store plus the marketplaces, stock held locally, maybe a small team on the ground later. What does the accounting and tax set-up actually involve, in what order, and where does the money go?" Here is the direct answer: the set-up is not complicated, but it is sequential, and the order matters. Get the entity and the VAT registration right and the UK becomes just another channel. Get them wrong and you cannot import cleanly, you cannot reclaim the import VAT, and you cannot list where you want to list.
I am a UK specialist ecommerce accountant, and Australian brands entering the UK are one of the fastest-growing groups we see. The questions are always the same three: do we need a UK company, when do we have to register for VAT, and what happens at the border. So here is the full map, in the order you need it. Every worked example below is a synthetic, illustrative example you can rerun with your own numbers.
Here's the Short Version
- You can sell to the UK from Australia, but once stock sits in a UK warehouse the practical answer is a UK VAT registration, and usually a UK company to hold the stock and the liability
- The £90,000 UK VAT threshold does not protect overseas businesses. If your business is based outside the UK and you supply goods to the UK, HMRC expects you to register regardless of turnover
- The £135 rules decide your per-order maths: at or under £135 the seller or the marketplace charges UK VAT at the point of sale, and no customs duty is due under the current relief. Over £135, duty and import VAT apply at the border
- That £135 duty relief is on its way out. It was announced for removal at Autumn Budget 2025, removal is due by March 2029 at the latest, and a new fee on low value imports is coming with it
- Australian origin gets you preferential rates under the UK Australia free trade agreement: on the codes we checked on 17 September 2026, an 8% and a 12% third country rate both drop to 0%. The catch is origin evidence, which most brands do not keep
- Postponed VAT accounting lets you declare and reclaim import VAT on the same return instead of paying it at the border. It is free, it is the single biggest cash flow fix for importers, and far too few brands use it
- Deadlines to build into the calendar: corporation tax is paid 9 months and 1 day after your year end, the tax return is due at 12 months, VAT is due 1 month and 7 days after each quarter, and your first accounts are due at Companies House 21 months after incorporation
- On an illustrative first year of £600,000 of UK customer takings, about £55,600 of VAT goes to HMRC across the year, and £12,000 of duty turns on one origin question. Those are the two numbers people miss when they model a UK launch
The Three Ways Australian Brands Enter The UK
There are three routes in, and they carry different tax and admin consequences. Most brands start on route one, move to route two within a year, and run route three the moment UK revenue justifies a local entity.
Route one: ship every order from Australia. Your Australian company sells to UK customers and parcels fly from your existing warehouse. The border does the work per order: under the £135 line the maths is VAT at the point of sale and no duty today, over it you get duty and import VAT. Returns are slow and expensive, delivery expectations are hard to meet, and anything sold through a marketplace gets the marketplace's VAT treatment, not yours. This route keeps your structure simple and is genuinely fine for testing demand. It stops being fine the moment UK volume picks up.
Route two: hold stock in the UK, trading as your Australian company. You send a bulk shipment to a UK third party logistics warehouse or into marketplace fulfilment like Amazon FBA, and UK orders ship domestically. This is where UK VAT registration becomes unavoidable in practice. When a marketplace sells your goods, the marketplace is usually the "deemed supplier" and accounts for the VAT on that sale, but you still owe the import charges when the stock lands, and your own website sales are entirely your problem. There is a fuller explanation of that split in how marketplace VAT actually works. It works, but you are running a UK operation from Sydney, with all the friction that implies.
Route three: stand up a UK company. A UK limited company holds the stock, employs anyone on the ground, signs the warehouse and platform contracts, and pays UK corporation tax on the profits. Your Australian company becomes the parent, or a supplier, or both. This is the structure behind almost every Australian brand you see selling seriously in the UK, and it is what the rest of this guide assumes.
One blunt note before the detail. You can ship direct from Sydney forever if you want to. You can, but we do not recommend it once the UK is more than a rounding error in your revenue. Duty on direct parcels is returning by 2029, returns get expensive, and the brands that win here localise early and treat the UK as a real market, not an experiment.
The £135 Line, And Why It Is Moving
Every order shipped from Australia is judged at the border on one number: the value of the consignment. That is the price the goods were sold for, excluding transport and insurance where those are separately shown on the invoice. It is the whole consignment, not each item, so a £90 order of two £45 bottles is still under the line.
| The order | What happens at the border | Who handles UK VAT |
|---|---|---|
| A £60 order shipped from Australia | Consignment is £135 or less: no customs duty under the current low value imports relief, for now | You, or the marketplace if it facilitated the sale: 20% UK VAT at the point of sale |
| A £180 order shipped from Australia | Above £135: duty at your commodity code's rate plus import VAT, about £36 on the goods value before duty | At the border. Recoverable only if you are UK VAT registered and set up for postponed VAT accounting |
| Any order fulfilled from UK stock via a marketplace | Import charges were already paid when the bulk shipment landed | The marketplace is usually the deemed supplier and accounts for the VAT on the sale |
| Any order fulfilled from UK stock via your own store | Same bulk import as above, no per-order border cost | You. Register, charge 20%, and file UK VAT returns yourself |
Now the part most founders do not know. The duty relief for sub-£135 consignments is being removed. The government consulted between November 2025 and March 2026 on replacing it, and confirmed in its response, published in July 2026, that low value imports will become subject to customs duty at full UK Global Tariff rates, with an additional fee confirmed to help cover administration. The announced timing is removal by March 2029 at the latest, with draft legislation already published.
Read that carefully, because it changes a plan that many Australian brands are currently running. If your UK strategy is built on shipping small parcels direct to consumers, it has maybe two good years left, then it gets noticeably more expensive. If you are weighing UK stock against direct shipping, this reform tilts the decision towards stock now. And if you sell through marketplaces, expect the fee and duty to flow through the platform, which means your landed cost is going up whether you like it or not.
The Registrations, In Order
Here is the sequence, with the deadlines that matter. Do these in this order and nothing blocks you later.
| What | When | The detail that matters |
|---|---|---|
| GB EORI number | Before your first import | Free, applied for online. If your business is not established in the UK, check eligibility: where you cannot hold one yourself, your customs agent works under theirs |
| UK company (if incorporating) | Before you commit to UK stock | £100 online, usually set up within 24 hours. Directors verify their identity, and you need a UK registered office address |
| UK VAT registration | Before you supply goods from the UK | The £90,000 threshold does not apply to overseas businesses. Register as soon as you are supplying the UK, and certainly before stock lands in a marketplace warehouse |
| Corporation Tax | At incorporation | Companies House sets it up for you at registration unless the company is dormant. Tax is due 9 months and 1 day after your year end, the return at 12 months |
| PAYE | Before your first UK payday | Employer National Insurance runs at 15% on pay above £5,000 a year per employee, with up to £10,500 of Employment Allowance for eligible employers |
| Ongoing Companies House | Every year | Confirmation statement at £50 online, first accounts due 21 months after incorporation, then 9 months after each year end |
Two of these deserve a warning. First, the VAT registration. Because the threshold does not apply to you, "we are nowhere near £90,000" is not a defence. Register late and you owe VAT on everything you sold from the date you should have registered. Second, the marketplace requirement. Amazon requires non-UK sellers with stock in UK fulfilment centres to hold a valid UK VAT number, and it blocks accounts that fail to provide one within 90 days of the goods arriving. That is a hard commercial fact that overrides any debate about whether you technically needed to register.
One nuance so you have the full picture: if every single sale you make is a zero-rated "deemed supply" through a marketplace that handles the VAT, HMRC allows you to apply for exemption from VAT registration rather than registering. Read the trade-offs before you get excited: you cannot reclaim the import VAT on your stock, and the platforms still demand the number. For everyone reading this with plans, the answer is register. And if the UK is step one of a wider European push, our international VAT guide covers what comes next.
Importing Stock: Duty, Import VAT And The Australia Advantage
When you ship a bulk consignment, three things happen: duty is charged on the customs value (goods plus freight plus insurance to the UK border), import VAT is charged on top, and the whole thing usually clears through a customs agent. Your agent must be established in the UK, and the instruction to them must be in writing, stating whether they act for you directly or indirectly. With direct representation they declare in your name and the liability sits with you. With indirect representation they act in their own name and share the liability with you. Either way, due diligence on the declarations stays yours, so the commodity code is a decision you sign off, not paperwork your forwarder handles quietly. We covered the classification side in detail in our guide to duty and commodity codes. The full build of the landed cost model, the number all of this lands in, is in our landed cost post for importers.
Here is where being Australian pays, if you do the work. The UK and Australia have a free trade agreement in force since May 2023, and Australian origin goods can clear at preferential rates. We checked the live UK tariff on 17 September 2026:
| Product | Code checked | Third country rate | Australia rate |
|---|---|---|---|
| A finished supplement, food preparation | 2106 90 98 69 | 8% | 0% |
| Cotton T-shirts | 6109 10 00 10 | 12% | 0% |
| Skincare preparation | 3304 99 00 00 | 0% | 0% |
Two warnings about that middle column. The preference only applies where your goods meet the free trade agreement's rules of origin and you hold the right evidence, usually a declaration on the supplier's documents. A product blended and packed in Australia from imported ingredients can qualify, but only if the manufacturing meets the specific rule for its chapter, and "we put our label on it in Sydney" qualifies for nothing. If the evidence is not in place when the shipment lands, you pay third country rates, and claiming back the difference afterwards is a slow, awkward process. Ask your agent to confirm the origin position before your first container, not after.
Now the cash flow lever. Import VAT is normally paid at the border, then reclaimed later, which can tie up 20% of your landed cost for weeks. Postponed VAT accounting fixes that: if you are UK VAT registered, you declare the import VAT on your UK VAT return and reclaim it on the same return, so it never leaves your bank account. You must be registered to use it, and your import declaration needs to be set up correctly, which is a one conversation job with your agent. If your duty bill grows beyond pocket change, a duty deferment account gives you one monthly Direct Debit instead of paying at every consignment. Between postponed VAT and deferment, you can hold the timing of both taxes in your favour. We walked through deferment mechanics in the same duty guide.
UK Ltd, Branch, Or Stay Australian?
Three structures, one decision. Staying purely Australian keeps life simple while you are testing, but the moment you have people or premises of substance here, HMRC's rules for foreign companies with a UK branch or office can bring your UK profits into UK corporation tax, and the analysis gets fiddly. Registering the Australian company as having a UK establishment at Companies House is possible but leaves you filing in two regimes with one entity.
The standard answer, and ours, is a UK limited company. It is a separate legal entity, which means the UK risks stay in the UK, the liability for UK trade sits with a UK balance sheet, and a future buyer or investor can own the UK operation cleanly. Directors can be Australian residents, no UK residency requirement, but you will need a UK registered office address and each director needs to verify their identity with Companies House. Your Australian tax position stays with your Australian adviser, including how the UK company's profits are taxed in your hands at home, so keep them in the loop from day one rather than at year end.
Two things trip Australian groups up after incorporation. The first is intercompany pricing. If the UK company buys stock from the Australian parent, or pays it management fees, those transactions between connected companies must be priced on arm's length terms: what independent parties would have agreed. An exemption covers most small and medium sized businesses, but the rules can only ever adjust your profits upwards, never down, so set the prices sensibly from the start and keep the documentation. The second is banking. Open the UK business account the week you decide to launch, not the week you need to pay a supplier, because onboarding with an overseas director can take weeks. A UK fintech account alongside a high street bank is the usual pragmatic mix.
An Illustrative First Year In Numbers
Here is the whole machine running on one set of synthetic numbers. A UK company, stock imported from Australia, selling through Amazon, TikTok Shop and its own store, £600,000 of UK customer takings in year one. The duty assumption is 8% on the supplement code, so this brand is paying third country rates and has not yet sorted its origin evidence.
| Illustrative first UK year | £ | Note |
|---|---|---|
| Customer takings, VAT included | 600,000 | What UK buyers actually pay |
| Less UK VAT collected on sales | (100,000) | Never your money |
| Net revenue | 500,000 | What the P&L sees as sales |
| Landed stock cost | (162,000) | £150,000 goods, freight and insurance, plus £12,000 duty at 8% |
| Marketplace and payment fees | (75,000) | Blended across channels |
| Fulfilment and delivery | (40,000) | 3PL plus carrier costs |
| Marketing | (120,000) | Paid social and creators |
| UK overheads | (35,000) | Accounting, software, insurance, registered office |
| Profit before tax | 68,000 | |
| Corporation tax, marginal relief | (14,270) | Effective rate of about 21% |
| Profit after tax | 53,730 |
Now look at what sits outside the P&L. The VAT is the big one: £100,000 was collected from customers, the brand reclaims £32,400 of import VAT through postponed accounting plus roughly £12,000 of VAT on its UK costs, and pays HMRC about £55,600 across the year, in quarterly instalments of roughly £13,900, due 1 month and 7 days after each quarter ends. That money sits in the bank for a few weeks at a time and it is very tempting. Ring-fence it, because the day it is spent on stock is the day the VAT bill breaks the cash flow.
Then the duty question. If this brand's products qualify as Australian origin, the £12,000 of duty disappears, profit before tax rises to £80,000, the tax bill rises modestly to £17,450, and the brand keeps an extra £8,820. One origin analysis, done once, is worth more than most marketing experiments at this stage of a launch. That is the kind of thing we mean when we say classification is a profit decision, not a filing chore.
The Mistakes We See Australian Brands Make
- Treating the £90,000 threshold as universal. It is not, for you. Overseas businesses register regardless of turnover, and the late-registration VAT bill is the worst possible way to find out
- Shipping duty-paid parcels with no reclaim path. If the parcels are DDP and you are not UK VAT registered, the import VAT you absorb is never recoverable. Fix the registration before you fix the freight
- Assuming the marketplace handles everything. The deemed supplier rules cover the VAT on qualifying marketplace sales, but the import charges on the stock are yours, your own store has its own VAT duties, and sales to UK businesses follow different rules again
- No origin evidence in the file. The difference between 8% and 0% on a year of shipments is thousands of pounds, and it is claimed at import with documentation, not after the fact from memory
- Spending the VAT float. Twenty percent of a consumer brand's takings is a loan from HMRC with a brutal repayment schedule. The brands that get this wrong are the same ones that look profitable right up until the day they are not
FAQ
Do I need a UK company to sell into the UK from Australia?
Not always. You can sell to UK customers from Australia, and if every order goes through a marketplace that handles the VAT there are routes that leave you unregistered. But once you hold stock in the UK, the practical answer changes: Amazon requires a UK VAT number from non-UK sellers storing stock in its UK fulfilment centres, and a UK company is the cleanest way to hold that stock, carry the registration and pay UK corporation tax on the profits.
Do I need to register for VAT in the UK as an Australian business?
Usually yes, and sooner than founders expect. The £90,000 UK VAT threshold does not apply to businesses based outside the UK, so supplying goods to the UK triggers registration regardless of turnover. There is a narrow exemption route if every sale is a zero-rated deemed supply through a marketplace, but you then cannot reclaim import VAT on your stock and the platforms still ask for the number. For most brands, just register.
What duty will my Australian products pay when they enter the UK?
It depends on the commodity code and the origin. On the live tariff we checked on 17 September 2026, a finished supplement code carried 8% third country duty but 0% for Australia, and cotton T-shirts carried 12% versus 0%. The 0% applies only where the goods meet the free trade agreement's rules of origin with the right evidence, so have your agent confirm the position before your first shipment. And note the small-parcel duty relief is being removed by March 2029 at the latest, so the per-order maths is changing too.
The Bottom Line
Selling from Australia to the UK is easy. Setting up to sell properly is a sequence: a UK company, a GB EORI, a UK VAT registration before the stock lands, a customs agent who documents origin correctly, and an accounting rhythm that keeps the VAT where it was always meant to be. Do the sequence and the UK is a market like any other, with the bonus that qualifying Australian products can enter at 0% duty while competitors shipping the same goods from elsewhere pay 8% or 12%.
Do it out of order and the UK is where good brands quietly lose money: late VAT registration, duty paid that could have been avoided, a float that got spent, a platform account blocked at the worst possible moment. We see it every month, and it is all avoidable.
This article is general information, not tax or customs advice, and rates and rules change. If you want the sequence mapped for your own numbers, that is the sort of work we do all day. We are specialist social commerce accountants working with ecommerce brands from £1m to £20m, including a growing number of Australian groups standing up their UK operations. Book a call and we will walk your launch plan line by line, before your first shipment rather than after.