Shipping to UK from US: VAT, Customs, and Carrier Guide for E-commerce

US to UK Shipping Overview

The United Kingdom represents a major market for US e-commerce sellers. However, post-Brexit regulations including mandatory VAT collection have added complexity. Here's what you need to know.

UK VAT Requirements (Critical)

Since January 2021, US sellers must:

Requirement	Threshold	Action Needed
VAT Registration	£0 (all B2C sales)	Register for UK VAT
VAT Collection	Items ≤ £135	Collect 20% VAT at checkout
VAT Remittance	Quarterly	Pay collected VAT to HMRC

Low-Value Shipments (≤ £135)

Responsibility	Seller
Collect VAT	At checkout (20%)
Remit VAT	To HMRC quarterly
Customs duties	Usually not applicable
Import VAT	Not charged (already collected)

High-Value Shipments (> £135)

Responsibility	Buyer (typically)
VAT collection	At import (20%)
Customs duties	Charged at import
Total charges	Duties + 20% VAT

Carrier Rate Comparison

Standard Shipping (1-5 lbs)

Weight	USPS Priority Intl	UPS Standard	FedEx Economy	DHL eCommerce
1 lb	$48.50	$52.80	$48.20	$15.50
2 lbs	$55.20	$62.40	$55.80	$18.80
3 lbs	$62.80	$72.50	$64.20	$22.40
5 lbs	$78.40	$92.80	$82.50	$28.50

Atoship Commercial Rates

Weight	USPS via Atoship	UPS via Atoship	DHL via Atoship
1 lb	$38.50	$38.80	$12.20
2 lbs	$44.20	$46.50	$14.85
3 lbs	$50.80	$54.20	$17.50
5 lbs	$62.40	$72.50	$22.40

Best value: DHL eCommerce for economy, UPS/FedEx for speed

Transit Time Comparison

Service	Transit Time	Tracking	Best For
USPS First-Class Intl	14-28 days	Limited	Budget items
USPS Priority Intl	6-10 days	Full	Medium priority
DHL eCommerce	8-15 days	Partial	Cost-conscious
DHL Parcel Direct	5-10 days	Full	Balanced
UPS Standard	5-8 days	Full	Reliable delivery
UPS Expedited	3-5 days	Full	Faster service
FedEx Economy	5-8 days	Full	Reliable delivery
FedEx Priority	2-4 days	Full	Time-critical

UK Duty Rates

Product Category	Duty Rate	Combined (Duty + VAT)
Clothing	12%	~34%
Electronics	0%	20%
Shoes	8-17%	28-37%
Jewelry	0-4%	20-24%
Books	0%	0% (exempt)
Cosmetics	0%	20%
Food	0-20%	20-40%

IOSS vs Standard Import Process

IOSS (Import One-Stop Shop) - For EU

Note: IOSS applies to EU, not UK. UK uses its own VAT system.

UK VAT Collection Process

Collect 20% VAT at checkout

Mark package as "VAT Paid"

Submit quarterly VAT returns

Pay collected VAT to HMRC

DDP Options for UK Shipping

What is DDP to UK?

DDP Element	Included
Shipping	✓
Customs brokerage	✓
Import duties	✓
VAT	✓
Final delivery	✓

DDP Carrier Options

Carrier	DDP Available	Setup
UPS	Yes	Account required
FedEx	Yes	Account required
DHL Express	Yes	Account required
DHL eCommerce	Limited	Partial DDP

DDP Cost Estimate (Example: $100 product)

Component	Cost
Product	$100
Shipping	$25
Duty (12% clothing)	$12
VAT (20% of $137)	$27.40
Total DDP	$164.40

Common Shipping Strategies

Strategy 1: Collect VAT, Ship DDU

Pros	Cons
Simplest carrier setup	Duties paid at delivery (> £135)
Lower upfront cost	Customer may pay extra
Standard shipping labels	Potential refusals

Strategy 2: Full DDP

Pros	Cons
Best customer experience	Higher upfront cost
No delivery surprises	Complex duty calculation
Reduces refusals	Must estimate duties

Strategy 3: UK Fulfillment

Pros	Cons
Fastest UK delivery	Inventory investment
No import duties per order	Setup complexity
Local returns handling	Higher inventory costs

Returns from UK

Option	Cost	Time
Royal Mail return	£12-£25	7-14 days
UPS return pickup	$35-$50	5-10 days
Local UK returns facility	Varies	3-7 days

VAT on Returns

Scenario	VAT Treatment
Full return	Claim VAT refund from HMRC
Partial return	Adjust VAT on return
Exchange	No VAT change

Prohibited and Restricted Items

Category	Status	Notes
Alcohol	Restricted	Requires license
Tobacco	Prohibited	Cannot ship
Food products	Restricted	Health certificates
Plants	Restricted	Phytosanitary certificate
Cosmetics	Allowed	Requires compliance
Electronics	Allowed	CE marking required

Documentation Requirements

Required for All Shipments

Document	Purpose
Commercial invoice	Customs declaration
Packing list	Contents verification
HS code	Duty classification
VAT number	If VAT registered

Additional for High-Value (> £135)

Document	Purpose
Certificate of origin	Duty reduction
Conformity certificate	Product compliance

Brexit Considerations

Post-Brexit changes affecting US sellers:

UK separate from EU customs union
Separate VAT registration required (vs IOSS for EU)
Different duty rates than EU
Separate compliance requirements

Atoship UK Shipping Features

Multi-carrier comparison: USPS, UPS, FedEx, DHL
Commercial rates: 20-40% savings
VAT documentation: Proper labeling
HS code assistance: Correct classification
DDP estimation: Calculate all-in costs

Start Shipping to the UK

Create your Atoship account for commercial UK shipping rates and simplified customs.