According to government data, the UK sells over £350 billion of goods and services to customers in Europe. There’s a massive market, but since Brexit, it isn’t as easy as it once was to trade. A lot has changed in terms of the rules, and they continue to change, so we’ve created a comprehensive guide to VAT registration for UK businesses in Europe and what you should know before selling cross-border.
Brexit did change a lot, and now we’re treated as non-EU businesses for VAT purposes; the old assumption that a UK seller can make a specific number of EU sales before worrying about VAT is misleading.
Now, the EU’s €10,000 cross-border distance-selling threshold doesn’t protect a GB-established seller shipping goods from Britain. The threshold applies if the supplier is established in one EU Member State and goods are dispatched from that Member State to another.
Now, any goods sent from the UK to EU customers are imported into the EU, and all imported goods are subject to VAT regardless of their value. The former €22 import VAT exemption was abolished in 2021.
Whether the UK seller needs a local EU VAT registration depends primarily on the supply chain. You should be asking questions about:
If your UK company stores inventory in an EU country, it also needs a VAT registration (most of the time) within that country. A non-EU company can then use the Union OSS for qualifying B2C sales shipped from that country to consumers elsewhere in the EU.
Note: Union OSS doesn’t replace every VAT registration.
EU VAT depends on the destination and consumption principle. Intra-EU distance sales and qualifying distance sales of imported goods have VAT calculated according to country rules where the customer receives the goods.
There’s no single EU VAT rate, and Member States set their own standards. They can reduce rates within the EU VAT framework, which varies by product or service. As a UK business, it’s so important to understand the customer’s country and the correct VAT classification of the product in that country.
Then you’ve got local compliance. EU member states retain country-specific requirements in areas such as:
The European Commission specifically notes that individual Member States remain responsible for implementing and applying the VAT Directive domestically.
The rules for VAT invoices apply to most B2B transactions and specific B2C transactions. If your UK business uses OSS/IOSS, detailed transaction records must generally be retained for 10 years.
Note: Marketplaces are another important exception. An online marketplace can become the “deemed supplier” for VAT purposes. And from 1 July 2026, the EU introduced a temporary €3 customs duty per item on low-value consignments up to €150 imported from outside the EU.
One-Stop Shop (OSS) and IOSS (Import One-Stop Shop) simplify EU VAT obligations by consolidating multiple destination-country VAT liabilities into one registration, return and payment process.
You don’t need to force your business to submit separate returns in every customer country for transactions covered by the scheme.
You need to register for OSS/IOSS to collect VAT payments, which then distributes the appropriate amounts to the Member States where VAT is actually due.
Centralisation reduces risks of manually managing different currencies and following the correction procedures and payment methods across numerous tax authorities.
VAT registration for UK businesses is complicated, and managing the subsequent VAT payments is even more complicated. We highly recommend you get a fiscal representative to manage it for you.
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