Collect tax in the United Kingdom

In the United Kingdom (UK), Stripe Tax supports calculation and collection of VAT.

When to register for tax collection

See Thresholds to get insights about your potential tax registration obligations in the United Kingdom. Stripe also notifies you with email and Dashboard alerts when you need to register to collect tax. Learn more about how the monitoring tool works.

If you’re based outside the United Kingdom, you must register in the UK within 30 days of performing the first taxable transaction there. You’re also liable to register if you have reasonable grounds to believe that you’ll perform taxable transactions within the next 30 days. A taxable transaction is any sale made in the UK that’s neither exempt from VAT nor subject to reverse charge. Taxable transactions include those that are zero-rated for VAT purposes.

For example, if you’re based in the United States (US) and sell digital services to overseas customers, you must register in the UK as soon as you have reasonable grounds to believe that a UK customer will purchase your services. If a UK consumer has already bought your digital services, you must register within 30 days of performing the sale. However, if you only sell to UK businesses, you don’t need to register because such sales are subject to reverse charge and don’t constitute taxable transactions for UK VAT purposes.

The HMRC VAT Notice 700/1 Who should register for VAT provides more information on registration in the UK.

Threshold: 1 transaction in the UK.

Included transactions: Any taxable transactions that reverse charge doesn’t apply to.

If a remote business sells digital services or low-value goods into the UK exclusively through online marketplaces that are responsible for collecting tax on these sales, the seller isn’t required to register for UK VAT. These sales don’t count towards the seller’s registration threshold.

Register to collect tax

Find more information on how to register for VAT in the United Kingdom on the government website:

• General information about UK VAT
• How to register

After you’ve registered to collect tax in the United Kingdom, go to Registrations to add your registrations to Stripe in the Dashboard. This turns on tax calculation and collection in Stripe for your transactions in the United Kingdom.

Learn more about how to add your registration in the Dashboard.

How we calculate taxes

Stripe calculates VAT for your transactions in the United Kingdom. Stripe assumes most sales to be taxable unless specifically exempted. If you’re a remote seller providing digital services to UK customers, UK VAT is typically collected on sales to individuals. Tax isn’t charged on sales to business customers who provide their VAT identification number.

Stripe doesn’t calculate VAT on imported low-value goods that are shipped into the UK in packages valued at 135 GBP or less.

The United Kingdom has some territories outside the scope of the standard tax system that have different rules. Stripe won’t calculate tax for customers based there, even if you’ve added a registration for the UK. This applies to the following locations:

• British Virgin Islands
• Channel Islands (Guernsey and Jersey)
• Falkland Islands
• Gibraltar

Learn more about how Stripe handles excluded territories.

Northern Ireland applies its own special VAT rules. If you sell goods into Northern Ireland, you have to follow the same rules as other European Union countries. But if you sell services, you have to charge taxes based on the laws of the United Kingdom. Stripe Tax doesn’t support sales of goods to Northern Ireland.

Report and file your taxes

Stripe provides reports of your completed tax transactions. Go to Registrations to access these reports. Learn more about the different types of reports.

You’re responsible for filing and remitting your taxes to the United Kingdom. Stripe doesn’t file taxes on your behalf. However, we do have trusted partners who can help manage your filing and remittance.

Marketplace tax liability

The UK uses the terms “online marketplace operators” and “digital platform operators” to refer to marketplace operators that might have tax collection obligations. To qualify as an online marketplace operator, the business must set terms or conditions for the sale, process or enable customer payments, or handle ordering or delivery of the product. A business isn’t considered an online marketplace if it only processes payments, lists or advertises goods, or redirects customers to other websites or apps without further involvement in the sale.

The tax collection obligation for marketplace operators typically includes:

• Sales of digital services
• Sales of goods by remote sellers to UK private individuals when the goods are in the UK at the point of sale.
• Sales of goods to UK private individuals if the goods are imported into the UK in packages valued at 135 GBP or less.

Marketplace operators facilitating other types of sales might need to collect VAT based on different indicators and contractual arrangements.

A marketplace operator that collects UK VAT on a sale is treated as if it were buying the product from the merchant and selling it to the customer. This applies only for VAT purposes and doesn’t change the commercial position where the title to the product passes from the seller to the buyer.