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↑ Back to top
- 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?↑ Back to top
I am a UK merchant exporting goods abroad, including to the EU↑ Back to top
- The UK Government’s guide to exporting goods from the UK – a step by step checklist that all businesses can work through. It includes information on any licences you may need in order to export certain kinds of goods.
- UK businesses can check customs rules and restrictions, tax and duty rates, and what exporting documents you’ll need using this interactive guide.
- You need an EORI number that starts with GB to export goods abroad from a shop based in England, Wales or Scotland. You can get an EORI number online, here.
- Sending items through the post: A customs declaration may need to be filled out. This guide from the Royal Mail explains.
- If taking items physically with you out of the UK, these items may need to be declared.
- Here’s how you can appoint someone to deal with the customs regulations on your behalf.
- The UK Department of International Trade advice page
- The Department for International Trade’s (DIT) country-specific guides for UK businesses who are interested in selling overseas
- You can find out here about common and Union transit is an alternative way to move your goods through the EU.
- Using personal data of EU citizens: This page covers what actions you may need to take regarding data protection and data flows with the EU/EEA.
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?
- If there are limits to which countries being sold to, this can be set by going to: WooCommerce > Settings.
- For information on how to set up taxes, check out the Setting Up WooCommerce Taxes documentation page. Tax can be set to any tax rate or combination of rates, as well as different taxes per country using two digit country codes in the rates table.
- Customized tax reports can be generated using WooCommerce Analytics, which is free and included in core 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↑ Back to top
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↑ Back to top
- Moving goods into, out of, or through Northern Ireland guide from the UK Government
- You can sign up to an official support service, the Trader Support Service, if you move goods between Great Britain and Northern Ireland.
- There’s an important distinction to be made between moving your own goods, and selling goods to customers. Specific rules also apply if you are moving goods into or through Northern Ireland on their way to another country, for instance, the Republic of Ireland in the EU.
- If you plan to move goods between Northern Ireland and non-EU countries (including Great Britain), you’ll need an EORI number that starts with XI.
- The EU VAT rules will continue to apply in Northern Ireland for goods. Here’s information from the UK Government on accounting for VAT on goods moving between Northern Ireland and Great Britain, whether sold to customers or your own goods that are moving.
- Northern Ireland has a unique postcode prefix of BT. You can use this postcode in your WooCommerce store to configure shipping and taxes differently for customers based in Northern Ireland. The wildcard asterisk –
BT*– would match all postcodes starting with BT and the percentage tax rate that applies to you, can be applied.
- You may need to set up specific shipping rates or methods for Northern Irish customers. You can use the same postcode method to configure a Northern Ireland shipping zone. Remember to use the shipping zones drag and drop ‘sorting’ method to make sure WooCommerce matches the most specific zones first – it searches for customer address from top to bottom.
I have a business based in Northern Ireland↑ Back to top
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↑ Back to top
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.
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
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↑ Back to top
- You may wish to become aware of the VAT ‘place of supply’ rules for digital products.
- Here’s our documentation on how to set up EU VAT rates for digital products.
- There’s information here from the EU about registering for the VAT MOSS (Mini One Stop Shop) scheme, which is for businesses trading digital products or services. It means you can manage all your VAT for multiple EU countries in one place.
I sell subscription products↑ Back to top
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.
- While it’s not possible to modify an existing subscription out of the box, you can use the powerful AutomateWoo extension to create a workflow that will automatically recalculate the prices that a current subscriber will be charged.
- There’s also a custom mini plugin available that can recalculate tax settings for ongoing subscriptions. Please be aware of the caveats in the plugin readme file if you use this.
Conclusion↑ Back to top
Getting help↑ Back to top
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.)