If you ship to UK and EU customers from China, tax is now part of every order. The UK requires VAT to be charged at checkout on most low-value consignments, the EU collects import VAT through the Import One-Stop Shop (IOSS), and from 1 July 2026 the EU also applies customs duty to parcels that used to enter duty free. None of this makes Europe a bad market. It just means your fulfillment set-up has to handle tax correctly, or your customers will be asked to pay on the doorstep.
Fulfillmen ships UK and EU orders every day as part of its ecommerce fulfillment from China.
This guide explains the current rules in plain terms, works through a duty example, and shows how to structure UK and EU fulfillment from a China warehouse around them. It is general information, not tax advice, so confirm your own registrations with a VAT adviser.
The UK: VAT at the point of sale for goods of £135 or less
Since Brexit, the UK treats low-value imports differently from the EU. According to UK government guidance, overseas sellers selling consignments of £135 or less directly to UK consumers must charge and account for VAT at the point of sale, which means registering for UK VAT. Business-to-business sales can use a reverse charge if the buyer provides a UK VAT number, and different rules apply when you sell through online marketplaces, which generally collect the VAT themselves.
Above £135, import VAT and any duty are normally collected at the border. That is where a DDP shipping line matters, because it pays those charges before delivery instead of passing them to your customer.
The EU: IOSS for import VAT
For goods worth up to €150, non-EU sellers can register for IOSS, usually through an EU-based intermediary, collect VAT at checkout at the customer’s local rate, and file one monthly return. Parcels shipped under a valid IOSS number clear customs without the customer paying VAT on arrival. Without IOSS, import VAT and a carrier handling fee are typically charged to the customer on delivery, which is a common cause of refused parcels.
Selling into the UK or Europe from China? Send us your product list and target countries for a DDP quote by country, with no minimum order quantity.
What changed on 1 July 2026: EU duty on low-value parcels
The EU has abolished its €150 customs duty exemption. As PwC explains, from 1 July 2026 an interim flat duty of €3 applies per item category in a parcel, decided by commodity code. A handling fee is expected later in 2026, and standard customs duty rates are due to apply from 1 July 2028.
Two practical effects for China-based sellers:
- Mixed-category orders cost more. Bundles that combine product types now carry more duty than single-category orders.
- Product data must be accurate. Correct commodity codes on every SKU decide how many categories, and how much duty, each parcel carries.
Worked example: duty on a three-item parcel
Illustrative example: a customer in Germany orders two T-shirts and a phone case. The T-shirts share one commodity code, so they count as one item category. The phone case is a second category. Under the interim rule the parcel owes €3 x 2 categories = €6 in duty, on top of import VAT collected through IOSS. If the same customer bought three T-shirts instead, the parcel would owe €3. For a store that sells mixed bundles, that difference is worth building into pricing or free-shipping thresholds.
Quick reference: UK and EU rules side by side
| UK | EU | |
|---|---|---|
| Low-value threshold | £135 | €150 |
| VAT on low-value goods | Charged by seller at checkout (UK VAT registration) | Collected at checkout via IOSS, or from customer on arrival |
| Duty on low-value goods | Check current UK rules for your products | €3 per item category from 1 July 2026 (interim) |
| Marketplace sales | Marketplace usually accounts for VAT | Marketplace usually collects VAT and duty |
How to set up fulfillment from China for UK and EU orders
- Register where needed: UK VAT for direct UK sales, IOSS for EU sales up to €150.
- Collect tax at checkout: configure your store to show VAT-inclusive prices for UK and EU customers.
- Classify every SKU: give your warehouse accurate commodity codes, product descriptions and values.
- Use DDP lines: ship with carriers that pass your IOSS or VAT details to customs and settle duty before delivery.
- Review bundles: check how many duty categories each common order contains and price accordingly.
If you are unsure how DDP and DDU differ in practice, our guide to DDP vs DDU shipping walks through who pays what at each stage.
Want customers to pay nothing on delivery? We ship to the UK and Europe on DDP lines that pass your VAT or IOSS details to customs before the parcel lands.
Marketplaces vs your own store
The tax rules above apply mainly to direct sales through your own store. When you sell on a large marketplace, the platform usually becomes responsible for collecting VAT on low-value goods, and in the EU often duty as well. That simplifies tax, but it does not remove your fulfillment obligations: products still need accurate commodity codes and descriptions, and parcels still need to clear customs without delays. Many brands run both channels, so set up IOSS and UK VAT for the store while letting the marketplace handle tax on its own orders.
Handling returns from the UK and EU
Returns are where cross-border selling gets expensive. Sending a single parcel back to China rarely makes sense, so decide your policy before you launch.
- Returnless refunds for low-value items, where the cost of return shipping is higher than the product.
- A local returns address in the UK or EU that collects returns and sends them back in bulk, or resells them locally.
- Clear sizing and product information to reduce returns in the first place, especially for apparel.
Remember that VAT and duty paid on goods that come back may be reclaimable in some cases. Ask your VAT adviser how refunds and returned goods should be recorded so you do not pay tax twice on the same sale.
How Fulfillmen ships to the UK and Europe
Fulfillmen stores inventory in China, Hong Kong and India and ships worldwide through DHL, FedEx, UPS and our own dedicated lines, including DDP options so duties are settled before delivery. Orders sync from Shopify, WooCommerce and Amazon through a free API, and there is no minimum order quantity or monthly commitment. Learn more about our international logistics services.
Frequently asked questions
Do I need to register for VAT to sell to UK customers from China?
For direct sales of consignments of £135 or less to UK consumers, overseas sellers generally need UK VAT registration to charge VAT at checkout. Marketplace sales follow different rules.
Is IOSS mandatory for selling to the EU?
No, but without it your customers usually pay import VAT and a handling fee on delivery, which increases refused parcels and complaints.
How much duty is charged on small parcels to the EU now?
From 1 July 2026, an interim flat duty of €3 applies per item category in a parcel, with standard duty rates due from 1 July 2028.
Does a parcel with several items pay more EU duty?
Only if the items fall into different categories by commodity code. Three identical T-shirts count as one category and owe €3, while a T-shirt and a phone case count as two and owe €6.
Can I avoid my customers paying anything on delivery?
Yes. Collect VAT at checkout through UK VAT registration or IOSS, and ship on a DDP line that settles duty before delivery.
Expanding into the UK or Europe? Send us your product list and target countries and get a DDP shipping quote for every market you sell in.
