£135 Consignment Threshold vs Import VAT: Who Accounts For Taxes?

£135 Consignment Threshold is the UK value threshold used in special VAT rules for certain consignments of goods sold to customers when the goods are outside the UK at the point of sale. It differentiates whether VAT is collected and remitted at the point of sale or whether VAT and customs duties are applied and collected when goods are imported into the UK.

This entry compares the two common VAT treatments affected by the threshold and explains who typically carries the reporting and collection obligation under each scenario. Understanding the operational split can help warehouses, carriers, sellers and marketplaces set up compliant processes and choose whether to collect VAT at checkout.

Point‑of‑Sale VAT (Consignments At Or Below The Threshold)

When a consignment’s taxable value is equal to or below the threshold, VAT is generally due at the point of sale. That means the seller (or the online marketplace when it is the deemed supplier) adds UK VAT to the customer’s invoice and remits it to HMRC. The buyer receives a VAT‑charged invoice, and import clearance is usually simplified because VAT has already been paid.

Import VAT And Duties (Consignments Above The Threshold)

For consignments exceeding the threshold, VAT and any applicable customs duties are collected at the border on importation. Carriers or customs agents commonly handle the payment of import VAT and duty on behalf of the consignor or recipient during customs clearance. These charges can be billed to the recipient on delivery as an import handling or clearance fee, which can create surprises for consumers if not communicated up front.

Who Is Responsible: Seller, Marketplace, Carrier, Or Customer?

• Seller (Overseas Trader): If selling directly and the consignment is at or below the threshold, the seller must collect and remit VAT or ensure the marketplace does so when applicable.
• Online Marketplace: Many marketplaces are designated as the deemed supplier for VAT on qualifying sales. When that applies, the marketplace is responsible for VAT collection and reporting.
• Carrier/Customs Agent: For consignments above the threshold, carriers often pay import VAT and duty to HMRC and then recover those costs (plus handling fees) from the recipient.
• Customer (Recipient): If import VAT is unpaid at time of delivery, the recipient may be asked to pay VAT and handling charges.

Operational Consequences And Best Practices

Which party is responsible affects systems, pricing and the fulfilment chain. Sellers should choose a business model and integrate VAT collection into checkout if they will be liable. Marketplaces should confirm their legal obligations and update their onboarding processes for sellers. Carriers and 3PLs need systems to manage import VAT collection and item classification where they act as the importers of record.

Checklist For Compliance

• Determine Consignment Value: Ensure checkout logic computes the total consignment value correctly (including delivery or insurance if part of taxable supply).
• Confirm Marketplace Rules: Verify whether the marketplace is the deemed supplier and will collect VAT on qualifying consignments.
• Register For VAT If Needed: Overseas sellers may need to register for UK VAT unless the marketplace collects it on their behalf.
• Communicate To Customers: Show clear pricing and any import handling expectations to avoid delivery surprises and returns.

Example Comparison

Scenario A — Sale for £120 (at or below threshold): the seller or marketplace adds 20% UK VAT at checkout, collects £24, and remits it to HMRC. The parcel usually clears customs without additional VAT charges.

Scenario B — Sale for £300 (above threshold): the parcel arrives and import VAT and duty are calculated and collected during customs clearance; the carrier may pay on import and invoice the recipient for VAT plus handling.

In short, the £135 Consignment Threshold decides whether VAT is collected at sale (seller/marketplace responsibility) or handled at import (border collection and potential carrier charges). Knowing which side of the threshold an order falls on determines who must register, charge VAT, and how customers will experience payment and delivery.