UK VAT After Brexit: Registration, PVA, OSS and Small Parcels

How VAT Works in the UK (PVA, EU VAT OSS)

After Brexit, the UK's VAT system was completely separated from the EU system. For Polish exporters and importers, this means a need for separate registration and reporting. Although the VAT rules are similar (standard rate 20%, reduced rates of 5% and 0%), the UK does not take part in the EU's OSS/IOSS systems. If you are interested in VAT on imports specifically, see also How to settle VAT on import.

1. VAT registration in the UK and thresholds

• Registration threshold for UK businesses: £90,000 of taxable turnover in the last 12 months (GOV.UK: Register for VAT).
• For overseas businesses: no threshold – a business based outside the UK that supplies goods or services to the UK (or expects to within 30 days) must register regardless of turnover. An exemption from registration (which must be requested from HMRC) is possible only where all taxable supplies are zero-rated.
• A VAT number is needed to use Postponed VAT Accounting (PVA).

Accountants whose clients trade with the UK can read about partnerships between accounting firms and our customs agency.

2. Postponed VAT Accounting (PVA)

• A mechanism in place since 2021 that lets importers avoid paying VAT at clearance, instead accounting for it on the VAT return.
• Improves cash flow – import VAT does not have to be paid at the border.
• Requirements: UK VAT registration, a GB EORI number and selecting the PVA option on the import declaration (it cannot be changed after submission; GOV.UK).

3. EU VAT OSS (One Stop Shop)

• A system in place since July 2021 that allows VAT on B2C distance sales across the whole EU to be reported from a single country.
• Cross-border sales limit: €10,000 a year.
• Makes it easier for Polish companies to trade within the EU, but does not cover the United Kingdom.
• Northern Ireland: EU VAT rules still apply to goods there (under the Windsor Framework / Northern Ireland Protocol).

4. Small parcels and online platforms

• The UK has abolished the import VAT exemption for consignments valued at £15 or less (GOV.UK).
• For consignments of £135 or less, an overseas seller must charge VAT at the point of sale and account for it in the UK (except for a valid B2B sale where the UK customer provides a VAT number). Different rules apply to sales through online marketplaces – check GOV.UK guidance.
• For consignments over £135, normal VAT and customs rules apply on import.

5. Export and import – basic rules

• Supplies of goods from the EU to the UK are exports, as a rule at 0% VAT in the EU, provided the export is documented (see 0% VAT on imports from the UK).
• Import into the UK means import VAT payable at clearance or accounted for through PVA.
• Services: the place of taxation depends on the type of service and the status of the customer – check the rules for the specific service and consider separate UK registration where needed.

6. VAT in practice – tips for businesses

✅ If you sell goods in the UK (for example from a UK warehouse) or directly to British consumers, check whether you must register for VAT.
✅ Use PVA on imports – it improves cash flow.
✅ For B2C sales to EU customers, consider OSS to avoid multiple VAT registrations.
✅ Remember the special rules for Northern Ireland.
✅ Consider working with a UK tax adviser if you account for VAT in both countries.

VAT in the United Kingdom works similarly to the EU, but requires separate procedures. The biggest difference is the lack of OSS/IOSS in the UK, meaning separate VAT registration is required. On the other hand, PVA eases importers' cash flow. The rules for goods brought from the UK into the EU are covered in New VAT rules for goods imported from the United Kingdom into the EU. Questions about duty and formalities? Get in touch.

Frequently asked questions