You run a Shopify store, a supplier in China or the EU ships the goods, and you never touch the stock. So whose problem is the import VAT, and do you even need an EORI number? It's one of the most confusing corners of UK ecommerce tax, and getting it wrong means cash stuck at the border or a VAT return that doesn't add up.
This guide is for UK-based Shopify dropshippers who import goods, or whose model triggers UK import and supply VAT. We'll cover when you need a GB EORI number, how postponed VAT accounting (PVA) lets you avoid paying import VAT in cash, the £135 consignment rule that changes everything for low-value orders, and exactly which VAT return boxes to fill in.
Every figure here is for the 2025/26 tax year and tied to a gov.uk source. If you'd rather hand the whole thing to someone, our team at Zmartly's accounting service for Shopify sellers does this daily.
Do Shopify dropshippers need to worry about import VAT and EORI at all?
If you're the UK business that imports goods into Great Britain, or you act as the importer of record, then yes: you'll usually need a GB EORI number and you'll have UK import VAT to account for. Pure pass-through models where the customer is the importer work differently, so the first job is working out who actually imports the goods.
Dropshipping covers a few very different setups, and the VAT treatment hinges on the detail. The questions that matter are: where are the goods when the customer buys them, what's the consignment worth, and who is named on the import declaration.
Table of contents
- Do Shopify dropshippers need to worry about import VAT and EORI?
- What is an EORI number and when do you need one?
- What is postponed VAT accounting (PVA) and how does it help dropshippers?
- How does the £135 consignment rule change things?
- Which VAT return boxes do you fill in for PVA?
- Worked example: a £4,000 consignment with and without PVA
- Decision walkthrough: which VAT rule applies to your order?
- FAQs
What is an EORI number and when do you need one?
An EORI (Economic Operators Registration and Identification) number is the reference HMRC uses to identify your business when goods move across the UK border. You need one to make customs declarations or to use customs systems such as the Customs Declaration Service.
Per gov.uk, you'll need a GB EORI number if you "move goods between Great Britain (England, Scotland and Wales) or the Isle of Man and any other country (including the EU)". So if your business is the importer bringing dropshipped stock into GB, you need one.
What does a GB EORI number look like?
A GB EORI number starts with the country code "GB" followed by 12 digits, per HMRC's own design guidance ("GB or XI are 14 characters long, for example GB123456123456"). If your business is VAT-registered, your EORI is normally built from your VAT registration number with three zeros on the end, so a VAT number of 123456789 gives an EORI of GB123456789000.
You apply free of charge through gov.uk using your Government Gateway account. VAT-registered businesses are often issued the number on screen straight away.
What if a courier or supplier handles customs for you?
This is the bit dropshippers get wrong. If your business is established in Great Britain and someone else (a courier, freight agent or your supplier's logistics partner) deals with customs, you still need your own GB EORI number where you're the party importing the goods. Gov.uk is clear that if your business is established in GB you'll need an EORI even where a representative handles the paperwork.
You don't need an EORI only if the goods are not controlled and are for personal use. A business buying stock to resell is never "personal use".
What is postponed VAT accounting (PVA) and how does it help dropshippers?
Postponed VAT accounting lets a VAT-registered business account for import VAT on its VAT return instead of paying it in cash at the border and reclaiming it later. For a dropshipper importing stock, that's the difference between cash tied up for weeks and a simple in-and-out entry on the return.
According to gov.uk, "you do not need any approval to account for import VAT on your VAT Return." Two things must be true: the goods are imported for use in your business, and you include your VAT registration number on the import declaration. In practice that means entering your VAT number at header level in Data Element 3/40 on the declaration, and not using method of payment G.
Who can use PVA?
To use PVA your business must be registered for VAT in the UK. If you're not yet VAT-registered, PVA isn't available to you, and import VAT becomes a real cost rather than a timing entry. That's one reason the VAT registration threshold of £90,000 (current from 1 April 2024) matters so much to growing dropshippers: registration unlocks PVA and the ability to reclaim input VAT.
How do you get the figures for your return?
You account for import VAT using your monthly postponed import VAT statement. Per gov.uk, statements "will usually be available to view by the 10th working day of the month", you access them through the Customs Declaration Service using your VAT sign-in details, and you "can only access a statement for 6 months from the date it's published", so download and keep a copy each month.
How does the £135 consignment rule change things?
For consignments of goods valued at £135 or less sold to UK customers, UK supply VAT is charged at the point of sale rather than import VAT at the border. This shifts the VAT from the border to the checkout, and it's the single most important rule for low-value dropshipping.
Gov.uk states that "consignments of goods with a value of £135 or less that are outside" the UK "will have UK supply VAT charged at the point of sale." The £135 is the value of the whole consignment, not a single item.
There's a major split depending on how you sell:
- You sell direct through your own Shopify store. If the consignment is £135 or less and the goods are outside the UK at the point of sale, you (the overseas-dispatched seller) account for the supply VAT at point of sale and register for UK VAT to do so. For a UK business customer who gives you their VAT number, you don't charge VAT and they use the reverse charge instead.
- You sell through an online marketplace. Where £135-or-less goods outside the UK are sold through an online marketplace, "the online marketplace will be liable for the VAT." Marketplaces are also liable for VAT on goods of any value already located in the UK at the point of sale and sold by an overseas business.
A standalone Shopify store you own is generally not an "online marketplace" for these rules, so the point-of-sale VAT obligation usually sits with you, not Shopify. For consignments over £135, normal import VAT and customs rules apply at the border, which is where PVA comes back in.
Which VAT return boxes do you fill in for PVA?
When you use postponed VAT accounting, the import VAT goes through three boxes on your VAT return. Used correctly, the net VAT effect is nil where the goods are fully used for taxable sales, because the same figure goes in as output VAT and comes back out as input VAT.
The gov.uk instructions for completing your VAT return are:
| Box | What to include (gov.uk wording) | Effect |
|---|---|---|
| Box 1 | "the VAT due in this period on imports accounted for through postponed VAT accounting" | Adds the import VAT as output tax |
| Box 4 | "the VAT reclaimed in this period on imports accounted for through postponed VAT accounting" | Reclaims the same import VAT as input tax |
| Box 7 | "the total value of all imports of goods in this period, not including any VAT" | Records the net import value |
You take the Box 1 and Box 4 figures from your monthly postponed import VAT statement. Box 7 is the value of the goods excluding VAT.
Worked example: a £4,000 consignment with and without PVA
Illustrative example. Priya runs a VAT-registered Shopify homeware store as a sole trader. A supplier in the EU ships a single consignment of stock to her in Great Britain. The customs value is £4,000, and the goods are standard-rated, so import VAT at the standard rate of 20% (current) is £4,000 x 20% = £800. The goods are used entirely for her standard-rated sales, so the import VAT is fully reclaimable.
With PVA (she put her VAT number on the import declaration):
| VAT return box | Entry | Notes |
|---|---|---|
| Box 1 | £800 | Import VAT due, from her PVA statement |
| Box 4 | £800 | Same import VAT reclaimed |
| Box 7 | £4,000 | Net value of the imported goods |
Net cash cost of the import VAT: £0. The £800 nets to nil because it's both output and input tax on the same return.
Without PVA (import VAT paid at the border):
She pays £800 in cash to clear the goods, then reclaims it on a later VAT return once she has the evidence. Net VAT is still £800 - £800 = £0 over time, but she's been out of pocket by £800 in the meantime. For a dropshipper running multiple consignments a month, that working-capital gap adds up fast.
The lesson: get your VAT number onto the import declaration so PVA applies, and the £800 never leaves your bank account.
Decision walkthrough: which VAT rule applies to your order?
Run each order through these questions in order:
- Are the goods £135 or less per consignment and located outside the UK at point of sale? If yes, this is supply VAT at the point of sale, not import VAT. If sold through your own Shopify store, you account for it; if sold through an online marketplace, the marketplace is liable.
- Is it a B2B sale to a UK VAT-registered customer who gave their VAT number? If yes, you don't charge VAT on a £135-or-less direct sale; the customer uses the reverse charge.
- Is the consignment over £135, or already in the UK? Normal import VAT and customs rules apply. If you're VAT-registered and your VAT number is on the declaration, use PVA and report through Boxes 1, 4 and 7.
- Are you the importer of record into GB? If yes, make sure you hold a GB EORI number before the goods move.
When several models run side by side in one Shopify store, keeping the VAT treatment straight per order is exactly the kind of thing our Shopify seller accounting team sets up cleanly from the start.
Key takeaways
- A GB EORI number is needed whenever your GB-established business imports goods, even if a courier handles customs.
- PVA needs no approval, only UK VAT registration and your VAT number on the import declaration.
- Goods of £135 or less from outside the UK are point-of-sale supply VAT, not border import VAT.
- PVA flows through Box 1, Box 4 and Box 7, and nets to nil where the goods are fully used for taxable sales.
Want help getting your dropshipping VAT, EORI and PVA set up correctly from day one? Talk to a Zmartly accountant for Shopify sellers and we'll take the guesswork out of your import VAT.
FAQs
Do I need an EORI number for Shopify dropshipping?
If your GB-established business is the one importing goods into Great Britain, you need a GB EORI number to make customs declarations, even when a courier or freight agent handles the paperwork for you. You don't need one only if goods are not controlled and are for personal use, which never applies to stock bought for resale.
Do I have to pay import VAT in cash on dropshipped goods?
Not if you use postponed VAT accounting. PVA lets a UK VAT-registered business account for import VAT on its VAT return instead of paying it at the border. It needs no HMRC approval, only that your VAT number is on the import declaration.
What is the £135 rule for dropshipping into the UK?
For consignments of goods valued at £135 or less that are outside the UK at the point of sale, UK supply VAT is charged at the point of sale rather than import VAT at the border. For B2B sales where a UK VAT-registered customer gives their VAT number, the reverse charge applies instead.
Which VAT return boxes do I use for postponed VAT accounting?
You include the import VAT due in Box 1, reclaim the same import VAT in Box 4, and put the net value of the imported goods in Box 7. The Box 1 and Box 4 figures come from your monthly postponed import VAT statement.
Can I use PVA if I'm not VAT registered?
No. To use postponed VAT accounting your business must be registered for VAT in the UK. If you're not registered, import VAT on consignments over £135 is a real cost you cannot reclaim through the VAT return.
Is Shopify treated as an online marketplace for the £135 VAT rule?
A standalone Shopify store you own and operate is generally not an "online marketplace" for these rules, so the point-of-sale VAT obligation on £135-or-less goods from outside the UK usually sits with you, the seller, rather than with Shopify.
