Setting up UK taxes

Note

This guide is for merchants who sell in the United Kingdom. It's your responsibility to consult with local tax authorities or a tax professional to verify that you charge your customers the correct tax rates, and to ensure you file and remit your taxes correctly.

If you're new to Shopify, then before you start selling, you need to determine whether you should charge tax. You might need to register with various VAT member countries. After that, you can set up your taxes in Shopify to help ensure that you charge the correct rates wherever you sell. If you use Shopify Tax, then your sales to customers in the United Kingdom are tracked to determine whether you need to register. Refer to UK tax liability to learn more.

Note

If you're already selling on Shopify, then refer to Registration-based taxes in the UK instead.

Before you begin setting up UK taxes in Shopify

You need to determine whether you should charge taxes. If you're not sure, then consult with local tax authorities or a tax professional. Typically, you need to register for VAT if you're located in the United Kingdom, and your sales to UK customers are equal to or greater than £85,000 GBP within a 12 month period.

If you intend to sell to countries in the EU, then you might need to register with tax authorities in those regions as a result of Brexit. The process varies depending on where your business is based and where you sell, and on individual government requirements. It's your responsibility to determine where you need to register to charge VAT.

Set up the regions in which you're registered

After you've registered and have your VAT number, you can set up your taxes. You only need to perform this task once.

Steps:

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Countries/regions section, click United Kingdom.

3. In the Regional settings section, click Collect VAT.

4. Enter your VAT number. If you've applied for a VAT number but don't yet have one, then leave this field blank. You can update it when you receive your number.

5. Click Collect VAT.

After you set up your tax regions, you can then create tax overrides for products where the default tax rates don't apply.