Tax / Improvement (Admin)

UK VAT depends on where you ship from
Orders over £135 shipped from outside the UK aren't charged VAT at checkout

VAT on orders shipping to Great Britain is now calculated based on the fulfillment location selected by your order routing settings. This is the same approach used to calculate tax on orders shipping to the US.

On this page
  1. What's changing (in 30 seconds)
  2. Decision flow: when VAT applies and when it doesn't
  3. Orders affected / not affected
  4. Comparison by scenario
  5. Two ways to collect VAT at checkout
  6. 5 key points for developers
  7. 3 practical use cases
  8. One-line summary for proposals

1What's changing

VAT on orders shipping to Great Britain (GB) is now calculated based onthe fulfillment location your order routing settings select for each order.
Orders that, excluding tax and shipping, exceed £135and are routed to a location outside the UKare treated as imports, so no VAT is charged at checkout.

Deciding factor: fulfillment location

Your order routing settings decide which location fulfills each order, and VAT calculation follows that result. It works the same way as for orders shipping to the US.

£135

Threshold: £135 (excluding tax and shipping)

Orders over £135 shipped from a location outside the UK are treated as imports.Even if your store has a UK location,this treatment still applies.

2Decision flow: when VAT applies and when it doesn't

New order Ship to: Great Britain Excluding tax and shipping Over £135? No Not affected by this change Yes Location selected by routing is Outside the UK? Yes Treated as an import At checkout, no VAT is charged No (UK location) Ships from a UK location At checkout, VAT is charged
The key point: "which location the order is routed to"—not "whether the store has a UK location"—determines the outcome. Even if you have a UK location, orders over £135 that routing assigns to a location outside the UK are treated as imports.
The article doesn't detail the VAT logic (such as tax rates) for orders shipped from a UK location.

3Affected vs. unaffected orders

Affected

In scope

Shipping to GB × over £135 excluding tax and shipping × routed to a location outside the UK

Treated as an import, so no VAT is charged at checkout. This applies even if the store has a UK location.

Not affected

≤£135 Out of scope

Orders of £135 or less

Orders of £135 or less (excluding tax and shipping) aren't affected by this change.

NI Out of scope

Shipping to Northern Ireland

Orders shipped to Northern Ireland aren't affected.

Out of scope

Existing orders

Doesn't apply to orders that have already been created.

4Comparison by case

CaseRouted toVAT at checkout
To GB, over £135 Location outside the UK Not taxed Treated as an import
To GB · over £135(also has a UK location) Location outside the UK Not taxed Treated as an import even with a UK location
To GB · over £135 UK location Taxed Route orders to a UK location to collect VAT
To GB · £135 or less — No impact
To Northern Ireland — No impact
Existing orders — No impact
The article doesn't say how VAT was calculated before this change, exactly when it takes effect, or which plans are eligible. Published October 23, 2026.

5Two ways to collect VAT at checkout

A

Update order routing to assign orders to a UK location

Review your routing settings so affected orders are assigned to a UK location. Orders shipped from a UK location aren't treated as imports.

B
%

Collect duties and import taxes at checkout

For orders treated as imports, set up checkout to collect duties and import taxes.

Details are on the Shopify Help Center page "Charging VAT on orders over £135." The article doesn't include step-by-step instructions for the settings screens.

65 key points for developers

1. Tax calculation now depends on order routing

For orders to GB, changing your routing settings directly affects whether VAT is charged. Routing changes are no longer just a logistics concern—they're a tax concern too.

£135

2. The threshold excludes taxes and shipping

What matters is whether the order total, excluding taxes and shipping, exceeds £135. Test cases with cart values near the threshold make verification easier.

UK Outside

3. Having a UK location isn't a free pass

For stores with multiple locations, if an order is routed outside the UK—because of inventory availability, for example—it's treated as an import. The outcome can differ from order to order.

US

4. Same approach as for orders to the US

The article explicitly says this works "the same way as orders to the US." If you already handle fulfillment-location-based tax calculation for the US, the same thinking applies.

API ?

5. Scope boundaries and API behavior

Orders to Northern Ireland, orders of £135 or less, and existing orders are out of scope. How tax amounts appear in the Admin API and webhooks, and how this interacts with third-party tax services, isnot specified. If your app aggregates or syncs tax amounts, check the actual values on new orders.

73 practical use cases

EU/JP UK GB
USE CASE 1

Audit routing for stores with locations in the UK and abroad

Challenge
If you use both UK and non-UK locations, some GB-bound orders over £135 are routed to non-UK locations, and VAT is no longer collected at checkout.
Solution
Review your order routing settings and update them so GB-bound orders are assigned to UK locations.
Impact
Keeps VAT charged at checkout and helps customers avoid unexpected costs on delivery.
Technical note
VAT is determined by the routing result. Having a UK location isn't enough, so check which location each order is actually assigned to.
CHECKOUT Duties and import taxes
USE CASE 2

Collecting duties and import taxes for cross-border stores shipping directly from outside the UK

Challenge
Moving inventory to a UK location is difficult, and you want to keep shipping high-value GB-bound orders from outside the UK.
Solution
Leave routing unchanged and configure duties and import taxes to be collected at checkout.
Impact
Lets you recover tax-related costs at checkout, even for orders treated as imports.
Technical note
For setup steps, see the Help Center page "Charging VAT on orders over £135." The article doesn't mention pricing or eligible plans.
£135
USE CASE 3

Testing orders around the £135 threshold and mapping the impact

Challenge
Operations and support teams don't know which orders are affected by the new rule.
Solution
Place test orders covering combinations of cart value (around £135, excluding tax and shipping) × routed location (UK / non-UK) × destination (GB / Northern Ireland), and check what checkout shows.
Impact
Your team can share when VAT does and doesn't apply, and answer customer questions right away.
Technical note
Existing orders aren't affected, so always test with new orders.

8One-line summary for proposals

"VAT on GB-bound orders is now determined by"which location ships the order".
Orders over £135 shipped from outside the UK are treated as imports, so no VAT is charged at checkout — to collect it, route those orders to a UK location or collect duties and import taxes at checkout."