Here is an illustrative founder question: "We are a German supplement brand doing €12m a year across Germany, Austria and the Netherlands, and we want to launch properly in the UK. Our own store plus Amazon and TikTok Shop, stock held in a UK warehouse, maybe a small team on the ground later. What does the accounting and tax set-up actually involve, in what order should we do it, and where does the money actually go?" The direct answer: selling from the EU into the UK is a well-trodden path, but the order of operations matters more than it did before Brexit. Get the entity, the VAT registration and the origin paperwork right, and the UK becomes just another market on your dashboard. Get them wrong and you cannot import cleanly, you cannot reclaim the import VAT, and your marketplace accounts get blocked at the worst possible moment.
I am a UK specialist ecommerce accountant, and European brands entering the UK are one of the fastest-growing groups we work with. The questions are always the same three: do we need a UK company, when do we register for UK VAT, and what happens at the border now that the UK is a third country. So here is the full map, in the order you need it. Every worked example is synthetic, so rerun the maths with your own numbers.
Here's the Short Version
- You can keep selling from your EU warehouse, but the UK is a third country now. Every consignment crosses a real customs border, and your EU VAT returns do nothing here
- The £90,000 UK VAT threshold does not protect EU businesses: based outside the UK and supplying goods here, 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. Above £135, duty and import VAT apply at the border
- Northern Ireland is different. EU distance sales into NI have their own £70,000 threshold, and under it you charge VAT at your home country's rate
- The EU and UK trade under the Trade and Cooperation Agreement: 0% duty on most goods where they meet the rules of origin, with a statement on origin or importer's knowledge. Stock that only sat in an EU warehouse does not qualify
- Postponed VAT accounting lets a UK VAT-registered importer declare and reclaim import VAT on the same return: free, no application, and the biggest cash flow fix for importers
- You get to choose the structure: EU company with a customs agent, a UK establishment, or a UK limited company. Most brands that get serious choose the third
- Deadlines for the calendar: corporation tax 9 months and 1 day after your year end, VAT 1 month and 7 days after each quarter, and the low value parcel duty relief gone by March 2029 at the latest
- On an illustrative first year of £750,000 of UK customer takings: about £73,800 of VAT to HMRC, and £16,000 of duty turning on one origin question
What Actually Changed When The UK Left
The single biggest mindset shift for an EU founder: the UK is not a distant region of your home market, it is a third country, and the border is real. Since January 2021 every commercial consignment crossing from the EU to Great Britain goes through a customs process, your EU VAT return cannot include UK sales, and the EU's OSS and IOSS schemes do not reach UK-bound orders.
What did not change is demand: a German or Dutch brand with a strong product travels well in the UK, the language carries over, and the shipping distance is a day or two. The UK is close enough to treat casually, and different enough to punish that.
The Three Ways EU Brands Enter The UK
There are three routes in, and they carry different consequences. Most brands start on route one and move on once UK volume justifies it.
Route one: ship every order from your EU warehouse. Your EU company sells to UK customers and parcels cross the border per order: under the £135 line the maths is VAT at the point of sale and no duty under the current relief, over it you get duty and import VAT. Returns cross the border twice, couriers charge customers a clearance fee on delivered-at-place orders, and marketplace sales get the marketplace's VAT treatment, not yours. Fine for testing demand, and it stops being fine the moment UK volume picks up.
Route two: hold stock in the UK, trading as your EU 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 Munich.
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. Your EU company becomes the parent, or a supplier, or both. This is the structure behind almost every European brand selling seriously in the UK, and it is what this guide assumes. If your group builds from further afield, we walked through the same decision for Australian brands in that guide.
One blunt note before the detail: it is tempting to stay on route one "for now" for years. You can, but we do not recommend it once the UK is more than a rounding error in your revenue. The parcel relief route one leans on is going by March 2029 at the latest, and the brands that win here localise early.
The £135 Line, European Edition
Every order shipped from the EU 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, and excluding other identifiable taxes and charges. 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 the EU to a GB customer | £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 the EU to a GB customer | 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 using postponed VAT accounting |
| A £60 order to a customer in Northern Ireland | EU to NI is distance selling, not an import: under £70,000 a year of NI distance sales you charge VAT at your own country's rate | You, under your home country rules. Cross £70,000 and you register for UK VAT within 30 days |
| 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 EU founders have not priced in: the duty relief for sub-£135 consignments is going. At Autumn Budget 2025 the government announced the removal of the £135 relief, ran a consultation that closed in March 2026, and published its response and draft legislation in July 2026: removal by March 2029 at the latest, a new fee on low value imports, and new data and compliance requirements. The draft also introduces a "fiscal representative" role, a UK-based business that takes joint and several liability for an overseas seller's customs debts.
Read that carefully. If your UK strategy leans on shipping small parcels direct from your EU warehouse, it has a few good years left, then it gets more expensive and more administrative. If you are weighing UK stock against direct shipping, this reform tilts the decision towards stock. And if you sell through marketplaces, expect the fee and duty to flow through the platform.
Do You Need A UK Company, Or Can Your EU Company Trade Here?
Three structures, one decision. Staying purely in your home country keeps life simple while you test, and you can absolutely trade with UK customers from there. 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.
If your EU company wants a physical base here without incorporating, you register as an overseas company with Companies House: form OS IN01, sent within one month of opening for business, with a £124 registration fee. Note the logic: the trigger is having a place of business in the UK. With no base here, no Companies House registration at all, though you may still need to register for corporation tax with HMRC depending on what you do here.
The standard answer, and ours, is a UK limited company. It costs £100 to incorporate online and is usually registered within 24 hours. It is a separate legal entity: UK risks stay in the UK, the trade sits on a UK balance sheet, and a future buyer or investor can own the UK operation cleanly. Directors can be based anywhere in the EU, there is no UK residency requirement, but you need a UK registered office address, and identity verification is part of the process: before you register, each director verifies their identity through GOV.UK One Login (a biometric passport from any country works), and each director's personal code goes in with the registration filing.
Two things trip EU groups up after incorporation. First, intercompany pricing: if the UK company buys stock from the EU parent, or pays it management fees, connected-company transactions must be priced at arm's length, 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, so set sensible prices early 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 EU-resident director can take weeks. A fintech account alongside a high street bank is the usual mix.
The Registrations, In Order
Here is the sequence, with the deadlines that matter.
| What | When | The detail that matters |
|---|---|---|
| GB EORI number | Before your first import | Free, applied online, but usually needs a UK premises or establishment. If you are not established here you cannot hold one yourself: you appoint a customs agent, and they use their EORI |
| UK company (if incorporating) | Before you commit to UK stock | £100 online, usually within 24 hours. Each director needs a Companies House personal code from identity verification, plus a UK registered office address |
| UK VAT registration | Before stock lands in the UK, and before direct £135-and-under sales | The £90,000 threshold does not apply to overseas businesses: supply goods to the UK and HMRC expects registration regardless of turnover (NI distance sales have their own £70,000 threshold, see below) |
| 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 |
Now two warnings. First, VAT registration: "we are nowhere near £90,000" is not a defence, because the threshold does not apply to you. Register late and you owe VAT on everything you sold from the date you should have registered. Second, marketplaces: Amazon requires non-UK sellers with stock in UK fulfilment centres to hold a valid UK VAT number, and blocks accounts that fail to provide one within 90 days of the goods arriving. That fact overrides any debate about technicalities.
One nuance, so you have the full picture: if every sale is a zero-rated "deemed supply" through a marketplace that handles the VAT, HMRC allows an application for exemption from registration instead. The trade-offs: 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. If the UK is step one of a wider push, our international VAT guide covers what comes next.
Importing From The EU: Duty, Origin And The Paper Trail
Ship a bulk consignment from the EU and three things happen: duty on the customs value (goods plus freight plus insurance to the UK border), import VAT charged on top, and a customs agent handling the clearance. If your business is not established in the UK, you cannot hold a GB EORI number yourself: you appoint a customs agent, in writing, stating whether they act for you directly or indirectly. Direct representation puts the liability on you; indirect means they act in their own name and share it. Either way, the commodity code is a decision you sign off, not paperwork your forwarder handles quietly. We covered classification in our duty and commodity codes guide, and the landed cost build in our importer's post.
Here is where being an EU business pays, if you do the work. The UK and the EU trade under the Trade and Cooperation Agreement, and goods that meet its preferential rules of origin enter at 0% duty. We checked the live UK tariff on 18 September 2026:
| Product | Code checked | Third country rate | EU 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 table. First, the preference is not automatic, and it is not about where the goods were shipped from. To get the 0%, the goods must meet the product-specific rule for their code: enough working or processing in the EU or UK (the agreement lets the two cumulate) to count as EU origin. A product blended and packed in the EU from imported ingredients can qualify, but only if the manufacturing meets the rule for its chapter, and stock that only sat in a European warehouse does not qualify at all. Second, you need the paper: a statement on origin from the exporter on the invoice or another commercial document, or importer's knowledge held with supporting evidence. No evidence when the shipment lands means paying full UK Global Tariff rates, and claiming the difference back afterwards is slow and awkward. Keep the records for at least 4 years, and agree 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. No application, no approval: you instruct your customs agent in writing, they put your VAT number on the import declaration and select postponed accounting, and the import VAT lands on a monthly statement instead of a bill at the border. If your bills grow beyond pocket change, a duty deferment account gives you one monthly Direct Debit, taken on the 16th of the following month, so between 2 and 6 weeks of credit, instead of paying at every consignment. Between the two, you hold the timing of both taxes in your favour.
Northern Ireland Is Not Great Britain
One more thing before you launch, because the maps and the checkout settings will fight you on it: Northern Ireland follows different rules to England, Scotland and Wales. EU distance sales into Northern Ireland are treated as continuing EU trade, with a £70,000 a year threshold. Under it, you charge VAT at your home country's rate and need no UK VAT registration at all. Cross it, and you register for UK VAT within 30 days of the date you went over, accounting for UK VAT on NI distance sales from then on.
Everything else in this guide applies to Great Britain (England, Scotland and Wales). So do not lump Northern Ireland in with the rest of the UK in your shipping zones, VAT settings and marketplace programmes. It behaves more like an extension of your home market: have your accountant split NI sales from GB sales from day one.
An Illustrative First Year In Numbers
Here is the whole machine running on one set of synthetic numbers. A UK company, stock imported from the EU, selling through Amazon, TikTok Shop and its own store, £750,000 of UK customer takings in year one. The duty assumption is 8% on the supplement code, so this brand is paying full UK Global Tariff rates because its origin evidence is not yet sorted.
| Illustrative first UK year | £ | Note |
|---|---|---|
| Customer takings, VAT included | 750,000 | What UK buyers actually pay |
| Less UK VAT collected on sales | (125,000) | Never your money |
| Net revenue | 625,000 | What the P&L sees as sales |
| Landed stock cost | (216,000) | £180,000 goods plus £20,000 freight, plus £16,000 duty at 8% |
| Marketplace and payment fees | (85,000) | Blended across channels |
| Fulfilment and delivery | (45,000) | 3PL plus carrier costs |
| Marketing | (130,000) | Paid social and creators |
| UK overheads | (40,000) | Accounting, software, insurance, registered office |
| Profit before tax | 109,000 | |
| Corporation tax, marginal relief | (25,135) | Effective rate of about 23% |
| Profit after tax | 83,865 |
Then the VAT, which sits outside the P&L: £125,000 was collected from customers, the brand reclaims £43,200 of import VAT through postponed accounting plus roughly £8,000 of VAT on its UK costs and fees, and pays HMRC about £73,800 across the year, in quarterly instalments of roughly £18,450, 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 origin question. If the goods qualify as EU origin under the Trade and Cooperation Agreement, the £16,000 of duty disappears, profit before tax rises to £125,000, the tax bill rises modestly to £29,375, and the brand keeps an extra £11,760. One origin analysis, done once, is worth more than most marketing experiments at launch stage: classification and origin are profit decisions, not filing chores.
The Mistakes We See EU Brands Make
- Treating the UK as another EU market with slower shipping. It is a third country with a full customs border and a separate VAT system. None of your EU schemes reach it
- Treating the £90,000 threshold as universal. Overseas businesses register regardless of turnover, and the late-registration VAT bill is the worst possible way to find out
- Assuming your goods travel as "EU origin" because your warehouse is in Rotterdam. Sitting in a warehouse is not processing. Without the product-specific rule met and the paperwork held, you pay the full third country rate
- Shipping duty-paid parcels with no reclaim path. If the parcels are delivered duty paid and you are not UK VAT registered, the import VAT you absorb is never recoverable. Fix the registration before you fix the freight
- Lumping Northern Ireland in with Great Britain. It is distance selling with its own £70,000 threshold, and mixing the two up creates VAT returns you cannot reconcile
- Spending the VAT float. Twenty percent of a consumer brand's takings is a loan from HMRC with a brutal repayment schedule
- Incorporating the UK company but leaving intercompany prices undocumented. The transfer pricing rules can only ever adjust your profits upwards. Sensible prices and clean paperwork cost nothing from day one
- Skipping the product rules because the tax works. CE marking still works in Great Britain for most products, but check your sector against the product marking table, because not every product regulation is covered
FAQ
Do I need a UK company to sell into the UK from the EU?
Not always. You can sell to UK customers from your EU company, and if every order goes through a marketplace that handles the VAT there are routes that leave you unregistered. But hold stock in the UK and 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 UK VAT as an EU 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. The narrow exceptions: marketplace-only deemed supplies, sales only to UK VAT-registered businesses, and the £70,000 distance selling threshold for EU sales into Northern Ireland. For stock held in Great Britain, registration is not optional, and the platforms will demand the number anyway.
What duty will my EU products pay when they enter the UK?
It depends on the commodity code and the origin. On the live tariff we checked on 18 September 2026, a finished supplement code carried 8% third country duty but 0% for the EU, and cotton T-shirts carried 12% versus 0%. The 0% applies only where the goods meet the Trade and Cooperation Agreement's rules of origin with the right paperwork, so have your agent confirm before your first shipment. And 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 the EU to the UK is familiar territory. Setting up to sell properly is a sequence: the structure, the UK entity if you need one, 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 EU products can enter at 0% duty while competitors shipping the same goods from Asia pay 8% or 12%.
Do it out of order and the UK is where good European brands quietly lose money: late VAT registration, avoidable duty, 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 European 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.