Since Brexit, Great Britain and the EU are separate VAT and customs areas, so one Shopify and NetSuite stack must treat them as two markets. UK VAT is charged at checkout on imported parcels of £135 or less, while larger parcels pay import VAT and duty on entry. EU sales use OSS or IOSS. Northern Ireland follows EU rules for goods.
Most of the work is in routing. Each order has to reach the right NetSuite subsidiary, nexus and tax code, based on where the goods ship from and where they go. This article is general information, not tax or legal advice. UK and EU rules are still changing, so confirm your registrations and structure with a qualified adviser.
Key takeaways
- £135 is the UK dividing line. At or below it, the seller charges UK VAT at the point of sale. Above it, import VAT and customs duty apply at the border.
- Non-UK businesses get no VAT threshold. A business with no UK establishment must register for UK VAT from its first taxable UK sale.
- The £135 customs duty relief is ending by October 2028 at the latest.
- Northern Ireland follows EU VAT rules for goods. Businesses trading goods there with the EU use an XI VAT number.
- In NetSuite OneWorld, a UK subsidiary, an EU subsidiary or both can work. The right choice depends on where your stock sits.
What is the UK £135 rule?
Since 1 January 2021, goods sold to customers in Great Britain from outside the UK follow the rules in HMRC’s guidance on VAT and overseas goods sold directly to customers in the UK. For consignments of £135 or less sold directly (not through an online marketplace), UK supply VAT is charged at the point of sale. The seller collects it and reports it on a UK VAT return. Above £135, normal import rules apply: import VAT and any customs duty are paid when the goods enter the country, usually by the customer or by you under delivered duty paid (DDP) terms.
That means an EU brand shipping parcels to British consumers will usually need a UK VAT registration. According to VAT Notice 700/1, the £90,000 registration threshold does not apply to non-established taxable persons. If your business has no UK establishment, you must register as soon as you make taxable supplies in the UK, whatever their value.
Shopify supports this split. Its UK tax guidance says that when you add a UK registration, VAT is charged on orders of £135 or less. If the order is fulfilled from outside the UK and exceeds £135, it is treated as an import and VAT is not charged at checkout. If the order ships from a UK fulfilment location, UK VAT applies whatever the value.
The duty relief is ending
Today, goods worth £135 or less enter Great Britain free of customs duty, though VAT is still due. The government has confirmed it will remove that relief. Its policy paper on low value imports says the change will take effect on a date set by regulations, by October 2028 at the latest, after the government brought it forward from March 2029. The proposals include duty paid by sellers and marketplaces, and fiscal representatives for overseas sellers. Expect duty to become a line you calculate and record for low-value UK orders too.
How does Northern Ireland fit in after the Windsor Framework?
Northern Ireland is part of the UK VAT system, but it follows EU VAT rules for goods. HMRC’s guidance on VAT on goods moving between Northern Ireland and the EU sets out the detail. Businesses that sell or move goods between Northern Ireland and the EU use a VAT number with an XI prefix on those transactions instead of GB.
In practice:
- A brand in Northern Ireland selling goods to EU consumers is treated like an EU seller for distance sales and can use the One Stop Shop.
- An EU brand selling goods to consumers in Northern Ireland treats those sales much like intra-EU distance sales, rather than exports to Great Britain.
- Goods moving from Great Britain to Northern Ireland are still within the UK VAT system.
Shopify customers with BT postcodes need to land on the right tax logic. Test Northern Ireland addresses explicitly before you go live, and make sure NetSuite records the XI registration on those transactions.
Which rules apply to which shipment?
| Shipment | VAT | Customs duty |
|---|---|---|
| EU warehouse to GB consumer, £135 or less | UK VAT charged at checkout, UK VAT return | Currently relieved. Relief ends by October 2028 |
| EU warehouse to GB consumer, over £135 | Import VAT at the border | Due unless the goods qualify for preferential origin |
| UK warehouse to EU consumer, €150 or less | EU VAT via IOSS, or paid at import | Flat €3 per item category since 1 July 2026 |
| UK warehouse to EU consumer, over €150 | Import VAT at the border | Due unless the goods qualify for preferential origin |
| UK stock to UK consumer | UK VAT | None |
| EU stock to EU consumer in another country | Destination VAT via Union OSS above €10,000 | None |
For the EU side in detail, see our guide to EU VAT, OSS and IOSS for Shopify and NetSuite. The Commission’s guidance on the €3 duty explains how the flat fee is counted.
What about duties and rules of origin?
The UK–EU Trade and Cooperation Agreement removes tariffs only for goods that meet its rules of origin. HMRC’s guidance on using preference agreements explains how to claim it. Goods made in the UK or EU can often cross duty-free with the right origin statement. Goods made in Asia and stored in a UK warehouse usually pay duty again when they cross into the EU, and the reverse. Returns can cross the border twice. These costs belong in your margin reports, so map them to separate NetSuite accounts instead of burying them in shipping.
UK subsidiary, EU subsidiary or both in NetSuite OneWorld?
NetSuite OneWorld lets you run several legal entities in one account, each with its own base currency, nexuses and tax registrations. For a brand selling into both markets, there are three common shapes.
One UK subsidiary
A UK company holds UK stock and sells to Great Britain directly. EU consumers are served by import, through IOSS for parcels of €150 or less, or by EU stock under a Union OSS registration in the country the goods ship from. Simple to run, but every EU parcel from UK stock faces customs.
One EU subsidiary
An EU company sells across the EU under OSS and registers for UK VAT as a non-established business for British sales. It works while UK volumes are small. As they grow, duty, slower delivery and returns usually push you towards UK stock.
Both, with intercompany
Separate UK and EU subsidiaries each hold local stock and sell locally. Customers get faster delivery and fewer customs charges. You take on intercompany sales, transfer pricing and two sets of statutory accounts. NetSuite handles intercompany transactions well, but someone has to design and maintain them.
There is no single right answer. It depends on volumes, where your goods are made and where you hold stock. Our article on Shopify Markets and NetSuite OneWorld goes deeper on subsidiary design. If you hold stock in both places, read about inventory sync across EU warehouses too.
How should Shopify Markets map to NetSuite?
Shopify Markets lets you set a UK market and one or more EU markets, each with its own currency, pricing and duty settings. The integration then needs a routing table that decides, for every order, where it lands in NetSuite.
| Shopify data | NetSuite decision |
|---|---|
| Market and shipping country | Subsidiary and nexus |
| Fulfilment location | Inventory location and whether the sale is domestic, OSS or import |
| Presentment currency (GBP or EUR) | Transaction currency and exchange rate |
| Tax lines and duty lines | Tax codes and a separate duty item or account |
| Order value | Whether the £135 or €150 rule applies |
Keep duties apart from VAT. If Shopify collects duties at checkout under DDP terms, post them to a duty item or liability account, then match them to the carrier’s invoice. If you use a merchant-of-record service for some markets, the sale to the consumer and its VAT may sit with that provider rather than with you. Confirm the treatment with your adviser before you design the NetSuite entries.
We build these routing rules in our Shopify NetSuite integration work. For country context, see our United Kingdom and Ireland pages, or the Europe integration hub.
FAQ
Do I need a UK VAT registration to sell to British customers from the EU?
In most cases, yes. If you sell parcels of £135 or less directly through your own Shopify store, you charge UK VAT at checkout and need a UK registration. As a business with no UK establishment, no registration threshold applies.
Does the £135 rule apply to Northern Ireland?
Not in the same way. For goods, Northern Ireland follows EU rules. Goods from outside both the UK and EU worth £135 or less sold directly to Northern Ireland customers have import VAT charged, according to HMRC’s guidance.
Can one Shopify store serve both the UK and the EU?
Yes. Shopify Markets lets one store sell in GBP and EUR with different tax and duty settings. The work is making sure each order reaches the right NetSuite subsidiary, nexus and tax code.
What changes when the £135 duty relief ends?
Low-value imports into the UK will start to carry customs duty, with sellers or marketplaces responsible for paying it. Your Shopify checkout, landed cost reports and NetSuite postings will need to handle duty on small orders.
If your UK and EU orders already run through one Shopify store and the NetSuite side feels fragile, book a free NetSuite Shopify integration assessment. We will review your subsidiaries, nexuses and routing, and tell you what we would change.
