You sell on TikTok Shop. Your business is based outside the UK. To get those one-day deliveries and the algorithm love, you have moved stock into a UK fulfilment centre or a third-party warehouse. So who pays the VAT, and do you need to register?
Here is the part that catches most overseas sellers out. The moment your goods sit physically in the UK at the point of sale, the comfortable £90,000 registration threshold that UK businesses enjoy does not apply to you. As an overseas business, you can be required to register for UK VAT from your very first sale.
This guide walks through exactly when you must register, when TikTok Shop accounts for the VAT instead of you (the "deemed supplier" rule), the £135 consignment rule, and the digital-platform reporting that now sends your sales data straight to HMRC. It is written for non-UK sellers, and every figure is sourced to gov.uk.
If TikTok Shop is your channel, our accounting support for TikTok creators and sellers is built around exactly these rules.
Do overseas TikTok Shop sellers have to register for UK VAT?
If your stock is in the UK when a customer buys it, yes, you almost certainly must register for UK VAT, and there is no turnover threshold to shelter behind. If your stock is overseas and sold through TikTok Shop in consignments of £135 or less, TikTok usually accounts for the VAT instead of you.
That short answer hides a few important branches, so let us take them one at a time.
Why is there no VAT threshold for overseas sellers?
A UK-established business only has to register for VAT once its taxable turnover passes the registration threshold, which is £90,000 from 1 April 2024. (gov.uk)
You, as an overseas seller, are what HMRC calls a non-established taxable person, or NETP. An NETP is a business that makes taxable supplies in the UK but has no business establishment or fixed establishment here. HMRC's own guidance is blunt about the threshold: "Schedule 1A does not provide for exception from registration, like that afforded to UK established businesses, as there is no registration threshold." (gov.uk)
In plain terms, if you make a taxable supply in the UK as an overseas business, the £90,000 cushion is not yours. You can be liable to register from the first sale. The only question that matters is whether you are making a taxable supply in the UK at all, and that turns on where your goods are and how they are sold.
What is the deemed supplier rule for TikTok Shop?
TikTok Shop is an "online marketplace" for VAT purposes. Since 1 January 2021, the UK has made online marketplaces the "deemed supplier" in certain situations. That means the marketplace, not you, is treated as making the sale to the UK customer and is liable for the VAT on it.
This rule exists to collect VAT efficiently from millions of small overseas sales. It applies in two core scenarios:
- Goods located outside the UK at the point of sale, sold to a UK consumer in a consignment of £135 or less.
- Goods located in the UK at the point of sale that are owned by an overseas seller, sold to a UK consumer.
In the second case, HMRC treats you as making a zero-rated "deemed supply" of the goods to TikTok Shop, and TikTok then accounts for the VAT on the onward sale to the customer. (gov.uk)
The catch is that "deemed supplier" does not automatically mean "you do not register". Read on.
When does TikTok Shop account for the VAT instead of me?
TikTok is responsible for the VAT, and you may not need to charge it on those sales, in these situations:
| Where your stock is | Who the buyer is | Consignment value | Who accounts for the VAT |
|---|---|---|---|
| Outside the UK | UK consumer (B2C) | £135 or less | TikTok Shop (at point of sale) |
| Outside the UK | UK VAT-registered business (B2B) | £135 or less | The business customer, via reverse charge |
| In the UK | UK consumer (B2C) | Any value | TikTok Shop (on its onward sale) |
| In the UK | UK VAT-registered business (B2B) | Any value | You, the overseas seller |
For consignments above £135 sent from overseas, the deemed-supplier rule does not apply and normal import VAT and customs rules apply at the border instead. (gov.uk)
So far so good. But notice the bottom rows of that table. Once your stock is in the UK, a registration obligation appears even though TikTok handles the consumer VAT.
When must I, the overseas seller, register for UK VAT myself?
You must register for UK VAT in these situations.
Your stock is in the UK at the point of sale
This is the big one for TikTok Shop sellers using UK fulfilment. HMRC's NETP manual is explicit: "If the goods sold via the online marketplace are located in the UK at point of sale ... a liability to register under Schedule 1A will arise as normal." (gov.uk)
Even though TikTok accounts for the VAT on the sale to the consumer, you are making a deemed supply of those goods to TikTok, and that supply triggers registration. The good news is that once registered you can reclaim the import VAT you paid when the goods entered the UK, and your deemed supply to TikTok is zero-rated. (gov.uk)
You sell to UK VAT-registered businesses with UK stock
If you hold stock in the UK and sell B2B to UK VAT-registered businesses, the marketplace is not the deemed supplier for that leg. You make the supply directly, so you must register and account for the VAT yourself.
You sell off-platform, direct to UK customers
If you also sell from your own website rather than through TikTok Shop, the deemed-supplier rule does not cover those sales. For goods outside the UK sold direct to UK consumers in consignments of £135 or less, "the seller must charge and account for VAT at the point of sale," which means you must register for UK VAT to do it. The exception is a B2B sale where the customer gives you their UK VAT number, where the reverse charge applies and you can note "reverse charge: customer to account for VAT to HMRC" on the invoice. (gov.uk)
When you might not need to register
If every UK sale you make is goods that are overseas at the point of sale, in consignments of £135 or less, sold through TikTok Shop to UK consumers, then TikTok is the deemed supplier and you can apply to HMRC for exemption from registration, because your deemed supply to the marketplace is zero-rated. Many sellers still choose to register voluntarily so they can recover import VAT. (gov.uk)
How does the £135 consignment rule work?
The £135 figure is the dividing line for goods that are outside the UK at the point of sale.
- At or below £135 per consignment: VAT is charged at the point of sale rather than at the border. Through a marketplace like TikTok Shop, the marketplace accounts for it. Sold direct, you account for it.
- Above £135 per consignment: normal import VAT and customs duty rules apply when the goods cross the border.
The £135 limit applies to the value of the total consignment, not to each individual item inside it, and it excludes goods subject to excise duty (such as alcohol and tobacco), which are always outside this simplified treatment. (gov.uk)
Crucially, the £135 rule is about goods sent from overseas. Once your stock is already sitting in a UK warehouse, the £135 test is irrelevant. The goods are in the UK, so the UK-stock rules above apply at any value.
A decision walkthrough for your TikTok Shop setup
Run your situation through these questions in order.
- Is your stock physically in the UK when the customer buys it? If yes, you must register for UK VAT (Schedule 1A), regardless of turnover. Skip to registering. If no, continue.
- Is the consignment value £135 or less? If no, normal import VAT and duty apply at the border. If yes, continue.
- Is the buyer a UK VAT-registered business that gave you their VAT number? If yes, the reverse charge applies and the customer accounts for the VAT. If no, continue.
- Are you selling through TikTok Shop or another online marketplace? If yes, TikTok is the deemed supplier and accounts for the VAT to HMRC; you may apply for registration exemption or register voluntarily to reclaim import VAT. If you sell direct from your own site instead, you must register and account for the VAT yourself.
In practice, the mistake we most often see is a seller assuming "the marketplace handles my VAT" applies to UK-held stock. It does not remove the obligation to register. It only moves the consumer-facing VAT to TikTok.
Illustrative example: stock in a UK warehouse
Illustrative example. Mei runs an overseas homewares business with no UK establishment. To speed up TikTok Shop delivery, she imports £20,000 of stock into a UK third-party fulfilment centre and pays £4,000 import VAT (20% of £20,000) at the border. (gov.uk) Over the next quarter she sells the lot to UK consumers through TikTok Shop for £36,000 including VAT.
Because the goods are in the UK at the point of sale, Mei is liable to register for UK VAT from the start, even though her sales are well under £90,000. (gov.uk)
Once registered:
- Her sales to TikTok Shop are treated as zero-rated deemed supplies, so she charges no VAT on them.
- TikTok accounts for the 20% VAT on the onward sale to consumers.
- Mei reclaims the £4,000 import VAT on her UK VAT return as input tax.
| Item | Amount |
|---|---|
| Import VAT paid at the border | £4,000 |
| Output VAT on deemed supply to TikTok (zero-rated) | £0 |
| Import VAT reclaimed on VAT return | £4,000 |
| Net VAT position for Mei on these goods | £0 reclaimable, fully recovered |
If Mei had not registered, that £4,000 would be a sunk cost she could never recover. Registration turns it into a refund. The arithmetic: £20,000 x 20% = £4,000 import VAT; deemed supply to TikTok at 0% = £0 output VAT; net reclaim = £4,000.
What is digital-platform reporting and does TikTok report me to HMRC?
Yes. Under the UK's reporting rules for digital platforms, marketplaces like TikTok Shop must collect and report seller information to HMRC, including identity details and the amounts you were paid. The rules took effect from 1 January 2024, with the first reports due by 31 January 2025. (gov.uk)
There is a low-activity exclusion: a platform does not have to report a goods seller who received the equivalent of 2,000 euros (roughly £1,700) or less for fewer than 30 sales of goods in the reportable year. (gov.uk)
The practical takeaway is simple. HMRC now receives your TikTok Shop sales data directly. If your UK-stock sales should have triggered a VAT registration and they did not, that gap is far easier for HMRC to spot than it used to be. Getting registered correctly, on time, is the safe route.
Can an overseas seller use the Flat Rate Scheme?
The VAT Flat Rate Scheme is open to businesses with VAT-exclusive turnover of £150,000 or less expected in the next 12 months, and an overseas seller can in principle use it. (gov.uk)
Be careful though. If your costs of goods are very low relative to turnover, you may fall into the "limited cost business" category, which pays a flat rate of 16.5%. A business is a limited cost business if its goods cost less than either 2% of turnover, or £1,000 a year. (gov.uk) For many ecommerce sellers the standard method of accounting for VAT works out better, especially where you want to reclaim import VAT, which the Flat Rate Scheme largely blocks. This is worth modelling before you opt in.
Frequently asked questions
Do I need a UK company to register for VAT as an overseas seller?
No. You register as a non-established taxable person. You do not need a UK company or a UK address to be registered, though you do need to meet HMRC's identity and evidence requirements. The obligation to register comes from making taxable supplies in the UK, not from being incorporated here. (gov.uk)
If TikTok Shop collects the VAT, why do I still have to register?
Because the deemed-supplier rule only moves the consumer-facing VAT to TikTok. When your stock is in the UK, you are still treated as making a supply of those goods (a zero-rated deemed supply to TikTok), and that supply triggers registration under Schedule 1A. Registration also lets you reclaim the import VAT you paid. (gov.uk)
What if my stock is overseas and every sale is under £135?
If all your UK sales are of goods outside the UK at the point of sale, in consignments of £135 or less, sold to consumers through TikTok Shop, then TikTok is the deemed supplier and you can ask HMRC for exemption from registration. Many sellers register voluntarily anyway to recover import VAT. (gov.uk)
Does the £90,000 VAT threshold ever apply to me?
Not as an overseas business with no UK establishment. The £90,000 registration threshold (from 1 April 2024) is for UK-established businesses. As a non-established taxable person there is no threshold, so a UK taxable supply can require you to register from the first sale. (gov.uk)
Do I have to keep digital records once registered?
Yes. Making Tax Digital for VAT applies to all VAT-registered businesses. You must keep VAT records digitally and file returns using MTD-compatible software, and new registrations are signed up automatically unless exempt. (gov.uk)
Get your TikTok Shop VAT right from day one
Holding stock in the UK changes everything about your VAT position, and getting registered correctly protects both your cash flow (through import VAT recovery) and your peace of mind now that HMRC sees your platform data directly.
Want help registering for UK VAT as an overseas TikTok Shop seller and reclaiming your import VAT? Talk to a Zmartly accountant about TikTok Shop VAT and we will map your exact obligations.
