Investigate import tax
Depending on your business model, you may be planning to purchase and import goods from other countries to sell in your store.
This is an area of accounting that most traditional accountants will have very little experience with, in particular in the application of these rules to dropshipping.
Also, if you’re importing goods, a duty calculator can help you estimate the fees in your own business and plan for costs.

Intro to importing into the UK and EU

When you ship to the UK or EU, depending on how you sell either you or your customer is liable for import VAT and duties. The person or entity that is liable for this tax is known as the importer on record.
If your business is the importer on record for an import, then you will need an EORI number.

Shipping to customers in the UK or EU

Imported goods may be subject to import duties and import VAT. The import VAT is applicable based on the local VAT rate for the goods.
Prior to 1 Jan 2021
1 Jan 2021 to 1 Jul 2021
After 1 Jul 2021
When goods are imported/dropshipped into the UK and EU from outside of these boundaries, the import taxes are payable by the importer on record.
Most commonly this is the customer but you can arrange with your shipping provider for your company to be the importer on record, in which case you are liable for the import taxes (and the shipping provider pays on your behalf and will recharge this to you).
This latter approach is often called shipping Delivery Duty Paid (DDP) and is a way to ensure there are no delays for customers due to their goods being held up by the importing countries Customs authority.

Do I need an EORI number?

You need an EU or GB EORI number if you import goods into the UK/EU or ship goods that come from outside the UK/EU to customers in the UK/EU using the DDP method.
If the value of your goods declared is less than £15/€22 it typically benefits from Low Value Consignment Relief and no import VAT is due.
No change to the EU, and the same rules apply.
For the UK, when goods are imported, UK import VAT is paid by seller on their VAT returns, except for goods sold via platforms designated Online Marketplaces (OMPs) and consignments worth more than £135.
For OMP sales, the OMP collects and pays VAT, and you report the sale on a VAT return as a zero rated sale. For consignments over £135, the pre 1 Jan 2021 rules still apply.

Do I need an EORI number?

You may need both depending on how you sell.
You need a GB EORI number if any of these apply:
  • You import goods into the UK
  • Ship any goods that come from outside the UK to customers in the UK where the consignment's value (including shipping) is £135 or less
  • You ship goods from outside the UK to UK customers using the Delivery Duty Paid method.
You need an EU EORI number if any of these apply:
  • You import goods into the EU
  • You ship goods from outside the EU to EU customers using the Delivery Duty Paid method.
The EU brings in the same rules as the UK, I abolishing the Low Value Consignment Relief and charging VAT on returns instead of at border crossing, so you need to complete VAT returns in the EU countries to which you import/dropship.

Do I need an EORI number?

You may need both depending on how you sell.
You need a GB EORI number if any of these apply:
  • You import goods into the UK
  • Ship any goods that come from outside the UK to customers in the UK where the consignment's value (including shipping) is £135 or less
  • You ship goods from outside the UK to UK customers using the Delivery Duty Paid method.
You need an EU EORI number if any of these apply:
  • You import goods into the EU
  • Ship any goods that come from outside the EU to customers in the EU where the consignment's value (including shipping) is €150 or less
  • You ship goods from outside the EU to EU customers using the Delivery Duty Paid method.
Hint: Good news, the EU is also extending its One Stop Shop scheme so that you will be able to submit returns for all member states through just one member state.
This means that most English speaking businesses will register for VAT in Ireland and also means that we will be able to handle your EU-wide VAT returns as well as UK returns.

Low Value Consignment Relief

A VAT relief typically applicable to imported low value goods to the UK below £15 until 31 Dec 2020 and below €22 to the EU until 30 Jun 2021.

EORI numbers

This is a unique identifier that lets a country's local tax authority allocate any import VAT you have paid to your account. This import VAT can be paid by you directly, or more likely by your importing agent / shipper on your behalf. This is important to have tracked as you are likely going to reclaim import VAT paid if you are VAT registered.
The scenarios where you need an EORI number are described in the tabs below and depend on where your goods are shipped from and where they are shipped to. Note, the rules changed substantially in the UK 1 Jan 2021 and will change for the EU 1 Jul 2021, so we have outlined all scenarios.

How to get a UK EORI number

You can get this yourself by visiting https://www.gov.uk/eori or you can ask your accountant to do this for you. You can also do this as part of your VAT registration.

How to get an EU EORI number

You apply for an EORI in the member state where you will first have to clear/import goods. EORI applications (along with VAT applications) are only offered in the local language, so most will engage an agent to handle this process for them.
We would recommend Simply VAT for this process as we know them to provide a consistently high service level and turnaround time.
Last modified 10mo ago