Distance selling, selling goods directly to consumers across borders has undergone important changes in 2025. For businesses operating between the UK and EU, staying up to date with VAT requirements is essential to avoid compliance risks and hidden costs.
Key VAT Changes in 2025 for UK & EU Sellers
- For goods under £135 sold into the UK from abroad: VAT is charged at the point of sale. This means the seller collects VAT up front—consumers won’t be surprised with VAT or import charges at delivery.
- When goods are sold via a marketplace, that platform often becomes responsible for collecting and remitting the VAT.
- New EU rules (Directive (EU) 2025/1539) have been adopted to simplify how VAT is collected on distance sales of imported goods, particularly encouraging non-EU sellers and platforms to use the Import One-Stop Shop (IOSS) scheme. These rules will come into effect from 1 July 2028.
What These VAT Changes Mean for UK & EU Sellers
- Pricing & Margins: VAT must be included in displayed prices, impacting profit margins and cash flow.
- Marketplace partnerships: Using marketplaces can simplify VAT responsibilities if they collect VAT for you, but you need to clearly understand which party is liable.
- Registration burdens: Without using IOSS or similar simplified schemes, non-EU sellers may need VAT registrations in each country they sell to. This can add administrative cost and complexity.
- Upgrade your systems: Your order processing, payment, and accounting systems need to reflect VAT correctly at point of sale—not just at import.
Action Plan for Distance Selling Compliance (UK ↔ EU)
- Audit your product catalog → Identify which goods fall under the UK £135 rule.
- Decide your VAT handling model → Marketplace reliance vs. direct seller collection.
- Consider Import One-Stop Shop (IOSS) → Centralize EU VAT reporting via one member state.
- Update customer-facing systems → Show VAT-inclusive prices on your website, invoices, and checkout flow.
- Plan cash flow strategies → Adjust pricing to protect profit margins.
At Safari Star, we help online sellers:
Understand VAT rule changes.
Implement compliant checkout and invoicing systems.
Register and leverage schemes like IOSS for simplified EU reporting.
Contact Safari Star today to align your UK–EU distance selling strategy with the latest VAT reforms and trade confidently.