You've found VAT, or VAT has found you. Either you've crossed the registration threshold selling on TikTok Shop, or you registered voluntarily and now have a return to file. The question that trips people up is simple: what figure goes in each box when the platform has already taken its cut, charged the buyer, and paid you a net amount?
This guide walks you through the nine boxes of the UK VAT return for a TikTok Shop seller, shows who actually accounts for the VAT in each common setup, and runs a full worked example from gross merchandise value (GMV) down to the net VAT figure.
It's written for UK-established sellers on the standard 20% rate, which is the most common case. We'll flag where overseas sellers and the marketplace's own VAT duties change the picture. Figures are for the 2025/26 tax year.
Who actually accounts for VAT on a TikTok Shop sale?
If you're a UK-established business selling your own goods that are in the UK when sold, you account for the VAT, not TikTok. You charge VAT on the full price the customer pays and report it on your own return. TikTok only becomes the deemed supplier in specific overseas and imported-goods situations.
That one distinction decides whether you report a sale at all, so it's worth getting straight before you touch a single box.
When do you (the seller) account for the VAT?
You are the one who accounts for output VAT when both of these are true:
- Your business is established in the UK, and
- The goods are located in the UK at the point of sale.
In that case TikTok is just a facilitator. The sale is your supply to the customer, and the full selling price the buyer pays is your VAT-inclusive turnover. HMRC's guidance for marketplace operators is explicit: "if the seller is established in the UK, they will be liable for VAT." See charging VAT when goods are sold if you're an online marketplace operator.
This is the scenario the rest of the guide assumes, because it's where most UK TikTok Shop sellers sit.
When does TikTok account for the VAT instead?
TikTok, as the online marketplace, becomes the "deemed supplier" and charges the buyer VAT directly in two main cases:
- Goods outside the UK at the point of sale, in a consignment valued at £135 or less. The marketplace must charge and account for VAT at the point of sale. The £135 limit is the value of the whole consignment, not each item. See VAT and overseas goods sold to customers in the UK using online marketplaces.
- Goods already in the UK but sold by an overseas (non-UK-established) seller. Here the overseas seller makes a zero-rated "deemed supply" to TikTok, and TikTok accounts for the VAT on the onward sale to the customer.
There's a B2B carve-out: where the customer gives a valid UK VAT registration number, the marketplace does not charge VAT at the point of sale, and the customer accounts for it instead.
If TikTok has accounted for the VAT as deemed supplier, you do not also put that VAT in your Box 1. Double-counting it is one of the most common errors we see.
What goes in each box of the TikTok Shop VAT return?
The VAT return has nine boxes, and they're the same form whatever you sell. HMRC's box-by-box rules are in VAT Notice 700/12. Here's what each one means for a UK TikTok Shop seller on standard accounting.
| Box | Official label | What a TikTok Shop seller puts here |
|---|---|---|
| 1 | VAT due in the period on sales and other outputs | VAT on your TikTok sales to customers (20% of the net for standard-rated goods) |
| 2 | VAT due on acquisitions of goods made in NI from the EU | Usually £0 unless you trade under the Northern Ireland protocol |
| 3 | Total VAT due (Box 1 + Box 2) | The sum of Box 1 and Box 2 |
| 4 | VAT reclaimed on purchases and other inputs | Input VAT on stock, packaging, software and other business costs |
| 5 | Net VAT to pay or reclaim (Box 3 minus Box 4) | What you pay HMRC, or reclaim |
| 6 | Total value of sales and all other outputs, excluding VAT | Your net TikTok sales (the full sale price, VAT removed) |
| 7 | Total value of purchases and all other inputs, excluding VAT | Net value of your business purchases |
| 8 | Value of goods supplied from NI to the EU | Usually £0 |
| 9 | Value of goods acquired into NI from the EU | Usually £0 |
The two boxes that cause the most confusion are Box 1 and Box 6, so let's pin them down.
What goes in Box 6, and do TikTok fees reduce it?
Box 6 is the "total value of sales and all other outputs excluding any VAT." It's the net value of what you sold to your customers, full stop.
A key point: TikTok's commission, transaction fees and any affiliate or advertising costs do not reduce Box 6. Your output is the full price the customer paid for the goods, before the platform deducts anything. The fees TikTok charges you are a separate purchase. If TikTok charges UK VAT on those fees, that VAT goes in Box 4, and the net fee value goes in Box 7.
So you work from gross merchandise value, the total your customers were charged, not from the net payout that lands in your bank.
What goes in Box 1?
Box 1 is "VAT due in the period on sales and other outputs." For standard-rated goods, Box 1 should equal 20% of your Box 6 figure. If your products are zero-rated (some food, children's clothing and books, for example), the VAT in Box 1 is nil even though the sales still appear in Box 6. Check your products against VAT rates before you assume 20%.
A worked GMV-to-net example for 2025/26
Here's the full journey from the gross figure on your TikTok dashboard to the net VAT you pay HMRC.
Illustrative example. Imagine a UK-established seller, "Mara's Skincare Ltd", VAT-registered, selling standard-rated 20% skincare from UK stock through TikTok Shop. Over one VAT quarter in 2025/26:
- Gross merchandise value (total charged to customers, VAT-inclusive): £30,000
- TikTok commission and fees charged to Mara (VAT-inclusive): £3,600, of which £600 is UK VAT
- Other business purchases (stock, packaging, postage), net of VAT: £4,500, with £900 input VAT
Step 1: split the GMV into net sales and output VAT.
The £30,000 the customers paid is VAT-inclusive. To find the net, divide by 1.2:
- Net sales = £30,000 / 1.2 = £25,000
- Output VAT = £30,000 minus £25,000 = £5,000
Step 2: total the input VAT you can reclaim.
- VAT on TikTok's fees: £600
- VAT on other purchases: £900
- Total input VAT = £1,500
Step 3: drop the figures into the boxes.
| Box | Figure | How it's worked out |
|---|---|---|
| 1 | £5,000 | 20% of the £25,000 net sales |
| 2 | £0 | No NI/EU acquisitions |
| 3 | £5,000 | Box 1 + Box 2 |
| 4 | £1,500 | £600 TikTok fee VAT + £900 purchase VAT |
| 5 | £3,500 | Box 3 minus Box 4 (£5,000 - £1,500) |
| 6 | £25,000 | Net sales, fees not deducted |
| 7 | £7,500 | £3,000 net TikTok fees + £4,500 net purchases |
| 8 | £0 | No NI-to-EU goods |
| 9 | £0 | No EU-to-NI acquisitions |
Mara pays HMRC £3,500 for the quarter. Note that the £30,000 GMV, not the lower amount TikTok actually paid into the bank after fees, is what drives the VAT. The fees show up as input VAT to reclaim, not as a reduction in sales.
If you'd like to sanity-check the income tax or take-home side of your TikTok earnings too, our self-employed tax calculator and income tax calculator are a quick way to see the wider picture.
Could the Flat Rate Scheme change your boxes?
The VAT Flat Rate Scheme works differently, and it can suit some smaller TikTok sellers. You can join if your VAT-taxable turnover is £150,000 or less excluding VAT, per VAT Notice 733.
Under the scheme you pay a fixed percentage of your gross (VAT-inclusive) turnover and generally can't reclaim input VAT on purchases. So:
- Box 1 becomes your flat rate percentage applied to your gross turnover, not 20% of net sales.
- Box 6 is your gross turnover including the flat rate VAT.
- Box 4 is usually nil, because you don't reclaim input VAT (with a narrow exception for some capital assets over £2,000).
There's a 1% discount on your flat rate percentage for your first year of VAT registration. But watch the "limited cost business" trap: if you spend very little on goods (less than 2% of turnover, or less than £1,000 a year), you're forced onto the 16.5% rate, which often wipes out any benefit. For a product seller buying stock this is less likely to bite, but for a service-led or dropship-style account it can. Run both numbers before you choose.
What about the £135 imported-goods rule for your own stock?
If you import your stock into the UK first and then sell it from UK premises, the £135 marketplace rule does not move the VAT to TikTok. You're a UK seller selling UK-located goods, so you account for the output VAT as normal, and you reclaim the import VAT you paid (on a C79 certificate or via postponed VAT accounting) through Box 4.
The £135 deemed-supplier rule only applies where the goods are outside the UK at the point of sale. Once your goods are sitting in a UK warehouse, you're back in the standard scenario at the top of this guide.
Does TikTok reporting my sales to HMRC change my VAT return?
No. From 1 January 2024, digital platforms including TikTok report seller data to HMRC under the model reporting rules for digital platforms. Platforms send the data by 31 January following each calendar year, and you should not be reported if you make fewer than 30 sales and receive less than 2,000 euros (about £1,700) in a calendar year. See selling goods or services on a digital platform.
This is a transparency measure, not a new tax, and HMRC is clear that being reported "does not automatically mean that you owe tax." Your VAT obligations are unchanged by it. But it does mean your TikTok income is visible to HMRC, so your return needs to match your records.
Whatever your setup, you must keep digital records and file through compatible software under Making Tax Digital for VAT, which applies to all VAT-registered businesses.
Frequently asked questions
Do I include TikTok's commission in my Box 6 sales figure?
No. Box 6 is the net value of the goods you sold to customers, before TikTok deducts any commission or fees. The fees are a separate purchase: any UK VAT on them goes in Box 4, and their net value goes in Box 7.
Does TikTok charge the customer VAT, or do I?
If you're a UK-established seller with UK-located stock, you account for the VAT, not TikTok. TikTok becomes the deemed supplier mainly where goods are outside the UK in a consignment of £135 or less, or where an overseas seller's goods are sold from UK stock.
How do I split my gross TikTok sales into net and VAT?
For standard-rated goods, divide the VAT-inclusive total by 1.2 to get the net, then subtract the net from the gross to get the VAT. For example, £30,000 gross divided by 1.2 is £25,000 net, leaving £5,000 of VAT.
Should I use the Flat Rate Scheme as a TikTok seller?
You can if your VAT-taxable turnover is £150,000 or less excluding VAT. It simplifies your boxes but usually stops you reclaiming input VAT, and a low spend on goods can push you onto the 16.5% limited cost rate. Compare both methods on your real numbers before deciding.
Does HMRC seeing my TikTok sales mean I owe more tax?
Not by itself. The platform reporting rules are about transparency, and gov.uk states that being reported does not automatically mean you owe tax. Your actual VAT and income tax depend on your turnover, profits and the normal rules.
Key takeaways
- If you're UK-established and your stock is in the UK, you account for the VAT, not TikTok.
- Work from gross merchandise value: divide by 1.2 for standard-rated goods to split net sales (Box 6) from VAT (Box 1).
- TikTok's fees never reduce Box 6. Their VAT goes in Box 4, their net value in Box 7.
- The deemed-supplier and £135 rules only shift VAT to TikTok for overseas sellers or goods outside the UK at sale.
- Platform reporting to HMRC doesn't change your VAT, but it does make your sales visible, so keep records that match.
Getting the boxes right on a marketplace return is fiddly, and the cost of a mistake is real. If you'd rather hand it over, our team handles TikTok Shop bookkeeping and VAT end to end. Learn more on our page for TikTok creators, or book a free 20-minute call with a Zmartly accountant to talk through your setup.
