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  2. Ready for Brexit: A Guide for WooCommerce Store Owners

Ready for Brexit: A Guide for WooCommerce Store Owners

Now that it’s 2021 and the United Kingdom (UK) has officially left the European Union (EU), we’ve assembled some resources for businesses using WooCommerce and trading into or out of the UK, to help navigate some of the changes that you’ll encounter from now on.

Unless otherwise indicated, we are providing links to the official UK Government guidance.

This will help you make the adjustments you may need to make to your WooCommerce store to be up to date with tax rules, as well as importing and exporting arrangements.

There are three main factors to keep in mind that will affect you as a merchant, and your customers:

  • Tax rules
  • Customs implications
  • Communication with your customers

Taxes are complicated and different for everyone. While we provide information related to taxes in this post, we highly suggest you consult with your tax advisors to determine the correct actions for your specific situation.

Key Points

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  • The key resource for UK businesses remains the UK Government’s transition resources. This is a full and clear official guide that covers a lot of eventualities based on different goods and services customers might be trading with (from import and export of animal products, plants, to food and labelling, to intellectual property rights, legal and other professional services rules, and more). You can enter your specific details for a personalised view of what actions you need to take. We’ve highlighted specific sections below but recommend that you review this in full for all the guidance relevant to your business.
  • You can take a look at our developers blog post on Brexit for information on updates that we’ll be providing via the core WooCommerce code. The January 2021 4.9 update includes the latest up to date adjustments to support stores trading into and out of the UK that are affected by changes in the EU Customs Union, Single Market, and VAT regime. Our advice is to keep an eye on the changelog and always make sure that your version of WooCommerce is up to date.

The United Kingdom constitutes Great Britain (England, Scotland, and Wales) and Northern Ireland. Slightly different or additional rules apply to Northern Ireland, which will be covered below.

What’s your situation?

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I am a UK merchant exporting goods abroad, including to the EU

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Key Resources:

Other Information:

VAT Registration

You may need to register for UK VAT. The official guide is here. The VAT threshold of taxable turnover for UK businesses is £85,000 and the specific conditions are explained in the guide.

Since the UK will no longer be an EU member state, you may need to register for VAT for each country in the EU you are selling to.

This information from the European Union gives information about registering for VAT in each individual EU country. You may need to designate a local fiscal representative, as you already do if you sell to Norway, Australia, Japan or South Korea, for instance.

How to set this up with WooCommerce?

Terms and Conditions

You may wish to consider updating your customer terms and shipping policies to include which party is responsible for paying tariffs or import VAT. You could also consider changes to your returns and exchanges policy.

You can create a specific Terms and Conditions page if you don’t already have one, at Pages > Add New, then in WooCommerce > Settings > Advanced you can assign that page officially as the Terms and Conditions page. This means that this page will automatically appear inline during checkout, and the customer can scroll through content and tick the checkbox to accept.

I am a UK merchant importing goods from international destinations and EU countries

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Key Resources:

Remember that even if you’re based in the UK, but you’re selling goods to UK customers that are imported from abroad (for instance, if you’re running a dropshipping business through WooCommerce) you’ll need to bear in mind that all imported goods are now subject to VAT. Import rules for VAT can be found here.

I am a merchant in England, Scotland or Wales moving goods into Northern Ireland

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Key Resources:

Key Points:

I have a business based in Northern Ireland

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If you’re a VAT registered business trading in Northern Ireland, Her Majesty’s Revenue and Customs (HMRC) will need to be informed.

You will need to provide your VAT number starting with ‘XI’ instead of GB when communicating with an EU customer or supplier.

If you import goods worth more than the UK £85,000 VAT threshold from an EU country, you’ll need to register for UK VAT by post. There’s information here.

I am importing goods to customers based in the UK

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You need to register for UK VAT, and there’s no minimum threshold. You must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days).

There’s information and guidance here on how to register. You can register for UK VAT online here, but under some circumstances (including trading into Northern Ireland) you’ll have to register by post.

Sales VAT

All imported goods will now be subject to VAT at the point of sale, rather than the point of importation.

  • For orders below £135, merchants need to collect sales (supply) VAT instead of import VAT. This is charged to the UK consumer at the point of sale, which in this case, would be your WooCommerce store. As the merchant, you’ll need to report and pay the collected VAT through a regular UK VAT return. This replaces import VAT collection at the clearance by customs, or import payments to the delivery provider.
  • For orders above £135, the existing import VAT procedures will be used. You have the choice as the merchant to pay for import VAT and duties on clearance and reclaim it if you have a UK VAT number. Alternatively, you can let your customer pay at customs or to the delivery service.

Note that the £135 threshold only includes the value of the goods in the order, not the cost of shipping, insurance, etc.

You may need to register for and submit VAT returns to HMRC every quarter. If all of your orders are above £135 and you plan to let your customers pay the import VAT and duties directly, you may not need to register at HMRC.

How to do this with WooCommerce?

There’s a custom code snippet available in our documentation that can be used to define an order threshold to apply a certain tax rate. To apply it in this scenario, we recommend you use the plugin Code Snippets (or an equivalent). You can change the function name big_apple_get_tax_class in the sample code to anything you like, and change the figure 110 to 135.

Customizations are not covered under our support policy, so this isn’t something we can help implement or troubleshoot on your site.

I am trading digital goods or services across UK borders

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Key Resources:

I sell subscription products

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If you’re using WooCommerce Subscriptions to handle your subscription products, while a new tax rate will apply to customers who purchase a subscription for the first time, you may want to adjust your customers’ existing subscriptions to a new tax rate too, to take into account upcoming renewal payments.


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Getting help

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Remember, don’t hesitate to contact us for any help with configuration, or post in the WooCommerce support forums. (You may need to create an account before you can access that page.)