TikTok Shop VAT in the UK mainly comes down to two things: where your goods are located when the sale is made and where your business is established. If you are UK VAT-registered seller shipping goods from the UK, you will usually be responsible for accounting for VAT on the full amount paid by the customer, including delivery charges. TikTok’s commission does not reduce the VAT you need to report.
If the goods are shipped from outside the UK in consignments worth £135 or less, TikTok will generally collect and account for the VAT as the online marketplace. This can also apply to UK businesses drop shipping goods from countries such as China, so understanding the correct VAT treatment is important to avoid unexpected HMRC bills, pricing mistakes, and VAT reporting errors.
Key Takeaways
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UK VAT-registered sellers with stock in the UK usually account for VAT themselves
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On a standard-rated £24 VAT-inclusive sale, the VAT is £4
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The VAT registration threshold is £90,000 of taxable turnover, measured on a rolling 12-month basis
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TikTok fees do not normally reduce your VAT turnover
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For goods shipped from overseas, the £135 consignment value matters. For qualifying consignments of £135 or less, TikTok generally collects and accounts for VAT; for consignments over £135, normal import VAT and customs rules apply
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TikTok generally accounts for VAT on UK-held stock sold by overseas sellers to UK consumers through the marketplace
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Overseas businesses generally do not benefit from the £90,000 UK VAT registration threshold
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Delivery charges may also be subject to VAT, depending on whether delivery forms part of the sale or is a separate service
Who is Responsible for VAT on TikTok Shop UK Sales?
TikTok Shop is likely to meet HMRC’s definition of an online marketplace because it is involved in the sale terms, customer payments, and the ordering or delivery process. But that does not mean TikTok automatically handles the VAT on every sale.
Who accounts for the VAT depends mainly on four things:
- Where the goods are located when they are sold
- Whether the seller is established in the UK
- Whether goods shipped from overseas are worth £135 or less per consignment
- Whether the buyer is a consumer or a UK VAT-registered business
These rules have applied since 1 January 2021. Depending on the type of sale, either TikTok or the seller may be responsible for accounting for the VAT.
When Does TikTok Shop Collect the VAT Instead of You?
The first thing to look at is where the goods are when the sale takes place. This is more important than whether you consider yourself a UK seller or an overseas seller.
Under section 5A VATA 1994, TikTok may be responsible for accounting for the VAT where it facilitates the sale and either:
- The goods are imported into the UK in a consignment worth £135 or less, or
- The goods are already in the UK, but the seller is established outside the UK
These are two separate situations. You do not need to meet both conditions for the marketplace VAT rules to apply.
TikTok Shop VAT on Goods Shipped from Outside the UK Under £135
If the goods are outside the UK when the sale is made and the total consignment is worth £135 or less, TikTok will generally collect the UK VAT at checkout and pay it to HMRC.
For VAT purposes, the transaction is treated as two separate supplies: you sell the goods to TikTok, and TikTok sells them to the customer. Because your deemed sale takes place while the goods are still outside the UK, it is generally outside the scope of UK VAT.
This rule applies whether the seller is based in the UK or overseas. So, if UK business dropships goods from abroad through TikTok Shop in consignments worth £135 or less, TikTok will generally account for the VAT. The seller should not account for the same VAT again.
The £135 limit applies to the total intrinsic value of the consignment, not to each item separately. Shipping and insurance costs are generally excluded where they are shown separately.
These low-value rules do not apply to certain consignments, including:
- Excise goods, such as alcohol and tobacco
- Non-commercial goods, such as gifts
- Certain goods from Jersey and Guernsey covered by the Import VAT Accounting Scheme
Note
The old VAT exemption for imported goods worth £15 or less was removed on January 1, 2021.
TikTok Shop VAT on Goods Shipped from Outside the UK Over £135
If the total consignment value is more than £135, the low-value marketplace VAT rules no longer apply. Instead, normal import VAT and customs rules apply when the goods enter the UK.
Who pays the import charges depends on who is responsible for importing the goods:
- If the customer is the importer of record, they may have to pay import VAT and any Customs Duty before receiving the goods
- If you are the importer of record, you pay the import VAT and may be able to recover it if you are UK VAT-registered, usually using a C79 import VAT certificate or postponed import VAT statement
The £135 threshold is important because going above it can change the VAT treatment entirely and may trigger import VAT and Customs Duty at the border.
TikTok Shop VAT on UK Stock Sold by Overseas Sellers
If an overseas seller keeps stock in the UK and sells it to UK customers through TikTok Shop, TikTok will generally be responsible for accounting for the VAT — regardless of how much the order is worth.
For VAT purposes, the seller is treated as making a zero-rated supply to TikTok, while TikTok is treated as making the sale to the customer. HMRC also confirms that sellers do not need to issue VAT invoices to the marketplace for these deemed supplies.
TikTok Shop VAT on UK Stock Sold by UK Sellers
If your business is based in the UK and the goods are already here when you make the sale, you will usually remain responsible for the VAT. If you are VAT-registered, you charge and account for the VAT yourself rather than TikTok doing it for you.
What If the Buyer is a UK VAT-Registered Business?
The position can be different when the customer is a UK VAT-registered business. In that case, you will generally account for the VAT yourself where:
- The buyer is VAT-registered
- The buyer gives TikTok its VAT number
- TikTok passes that VAT number and the sale details to you within 7 days, or within any longer period HMRC allows
For imported goods worth £135 or less per consignment, the rules are different. If the business customer provides its UK VAT number, TikTok will generally not charge VAT at checkout. Instead, the customer accounts for the VAT using the reverse charge.
Note
The reverse charge means TikTok does not collect the VAT from the buyer. Instead, the UK VAT-registered business reports the VAT itself on its VAT return and, if eligible, may claim the same amount back as input VAT.
For Example
If a UK VAT-registered business buys £100 of goods through TikTok and the reverse charge applies, TikTok may charge £100 with no VAT added. The buyer then records £20 VAT on its own VAT return as output tax. If it is entitled to recover the VAT, it may also claim the same £20 as input tax, so the net VAT cost can be £0.
How TikTok Shop VAT Works in Northern Ireland
Northern Ireland has different VAT rules from Great Britain, especially when goods move between Northern Ireland and the EU.
- If goods are already in Northern Ireland when sold to a Northern Ireland customer, TikTok will generally account for the VAT only if the seller is established outside both the UK and the EU; if the seller is based in the UK or EU, the seller will usually remain responsible for the VAT
- If an overseas business sells goods from an EU country to customers in Northern Ireland who are not VAT-registered, it may need to register for UK VAT once those sales go above £70,000 in a calendar year
If your TikTok Shop business stores or ships goods through Northern Ireland or the EU, it is worth checking the VAT position carefully, as the rules can change depending on where the goods and the seller are located.
Do You Need to Register for VAT to Sell on TikTok Shop?
The £90,000 VAT Threshold
If you are established in the UK, you generally need to register for VAT once your taxable turnover exceeds £90,000 in any rolling 12-month period. This is not based on the tax year, so the total does not reset in April.
At the end of each month, check your taxable sales for the previous 12 months. If they go over £90,000, you normally have 30 days to notify HMRC. There is also a faster rule: if you expect to make more than £90,000 of taxable sales in the next 30 days alone, you may need to register immediately.
Zero-rated sales, such as qualifying food, books, and children’s clothing, still count toward the threshold. Exempt and out-of-scope sales generally do not.
Do Not Use Your TikTok Payout to Measure Turnover
Your TikTok payout is not the same as your VAT turnover. TikTok may deduct commission, transaction fees, shipping charges, and other costs before paying you.
For VAT registration, you generally look at the value of your sales before TikTok deducts its fees and excluding VAT.
For Example
If you receive £88,000 after a 6% commission, your sales before commission would be about £93,600. That could already put you above the VAT registration threshold.
What If You Are an Overseas Seller?
Overseas businesses generally do not benefit from the £90,000 VAT registration threshold. However, registration is not always compulsory where all UK stock is sold through an online marketplace and the marketplace accounts for the VAT.
Some overseas sellers still choose to register because this may allow them to recover import VAT on goods brought into the UK.
Are You UK-Established for TikTok Shop VAT?
Having a UK company does not automatically mean you are UK-established for VAT.HMRC looks at where the business is actually run. A real UK establishment usually means management happens here or you have a genuine UK base with people and resources.
A UK company, virtual office, or business address on its own is usually not enough. Simply setting up a UK company does not automatically change how the marketplace VAT rules apply.
How Do VAT Rules Work for UK TikTok Shop Sellers?
If you are UK-established and VAT-registered, you normally account for VAT on the full customer price, not your net TikTok payout after fees.
Worked Example: One UK TikTok Shop Sale
Assume you are a UK VAT-registered seller selling a standard-rated product for £24, including VAT and delivery. TikTok charges a 6% commission, and shipping costs you £1.40.
Step 1: Calculate the VAT on the sale
Because the £24 price already includes VAT at 20%, use the VAT fraction of 1/6:
£24 × 1/6 = £4 VAT
This means:
- Customer pays: £24.00
- VAT included: £4.00
- Sale value before VAT: £20.00
Step 2: Calculate TikTok’s commission
TikTok charges 6% of the £24 sale:
£24 × 6% = £1.44
If TikTok also charges 20% VAT on its commission:
£1.44 × 20% = £0.29
So the total commission cost is:
£1.44 + £0.29 = £1.73
Step 3: Calculate what is left after costs
£24.00 – £1.44 – £0.29 – £1.40 = £20.87
Step 4: Calculate the VAT payable to HMRC
The VAT on the sale is £4.00. If the £0.29 VAT on TikTok’s commission is recoverable as input VAT:
£4.00 – £0.29 = £3.71
So the net VAT payable to HMRC would be £3.71.
The key point is simple: VAT is calculated on the £24 paid by the customer, not on the amount left after TikTok deducts its fees and other costs.
If you incorrectly calculated VAT on the £20.87 instead:
£20.87 × 1/6 = £3.48
That would understate the output VAT by £0.52 per sale. Across 5,000 similar sales, that could mean £2,600 of under-declared VAT, before interest or penalties.
Figures are illustrative. Your actual VAT position will depend on your product VAT rate, TikTok fees, shipping arrangements, and whether input VAT is recoverable.
Worked Example: Overseas Seller, Two TikTok Shop Orders
Assume you are based outside the UK and sell the same £22 product through TikTok Shop. The only difference is where the goods are stored when the sale is made.
Order A: Shipped From Outside the UK
The £22 item is sent from your overseas warehouse. Because the consignment is £135 or less, TikTok will generally collect the UK VAT from the customer and pay it to HMRC.
Your supply to TikTok is treated as taking place outside the UK, so this sale on its own would not normally trigger UK VAT registration.
Order B: Shipped From UK Stock
The same £22 item is stored in a UK warehouse or 3PL and shipped from there. Because the goods are already in the UK and you are an overseas seller, TikTok will generally account for the VAT on the customer sale.
Your supply to TikTok is treated as a zero-rated deemed supply. If you paid import VAT when bringing the goods into the UK, VAT registration may also allow you to recover that import VAT, subject to the normal rules.
The takeaway is simple: the product, price, and platform are the same, but the stock location changes the VAT treatment.
Figures are illustrative. Your actual VAT position will depend on where the goods are stored, how they entered the UK, and whether you are registered for UK VAT.
Is VAT Charged on TikTok Shop Delivery Fees?
Usually, yes. If delivery is part of the customer’s order, it normally follows the same VAT rate as the goods, even if the delivery charge is shown separately.
If delivery is treated as a separate service, it is usually charged at the standard VAT rate, even when the goods themselves are zero-rated.
If TikTok covers or subsidizes the delivery cost, check your settlement report to see how the payment has been treated. HMRC has not published specific guidance for TikTok delivery subsidies, so unusual or significant amounts may need a closer look.
How Does VAT Apply to TikTok Fees, Commission, & Advertising?
The VAT treatment of TikTok’s fees depends mainly on who sends you the invoice and where your business is based.
- If you are UK-established and billed by a UK entity, 20% UK VAT will usually be added. You can normally reclaim it if you have a valid VAT invoice
- If you are based outside the UK, UK VAT may not apply. You may instead need to deal with VAT under the rules in your own country
- Advertising fees usually follow the same principle, so check the supplier details on each invoice
- Affiliate commissions may also include VAT if the creator is VAT-registered
- If you use the Flat Rate Scheme, sales where TikTok or the business customer accounts for VAT are generally left out of your flat rate turnover
The safest approach is to check each invoice carefully, because the VAT treatment can vary depending on the supplier and the type of fee.
Common TikTok Shop VAT Mistakes
- Looking at payouts instead of sales. Your VAT turnover is based on the full value of your sales before TikTok takes its fees.
- Thinking the £135 rule only applies to overseas sellers. It can also apply to UK businesses shipping goods from abroad.
- Forgetting about other sales channels. Your TikTok, Amazon, eBay, Shopify, and other taxable sales can all count toward the £90,000 VAT threshold.
- Assuming TikTok handles all the VAT. TikTok only accounts for VAT in certain cases, so UK sellers with UK stock will usually still need to deal with it themselves.
- Splitting one business into two to stay below the threshold. HMRC can challenge this if the businesses are closely connected.
- Using the wrong VAT rate. A wrong product tax code can mean paying too much VAT or facing a backdated HMRC bill.
What HMRC Already Knows About Your TikTok Shop Sales
Since 1 January 2024, digital platforms have had to collect certain seller details and report them to HMRC each year. They must also give you a copy of the information they report.
There is a small exception if you make fewer than 30 sales in a calendar year and receive less than €2,000 from those sales. Most active TikTok Shop sellers will be above these limits.
This does not automatically mean you owe tax, but it does mean HMRC may already have its own record of your sales activity.
Conclusion
TikTok Shop VAT mainly depends on where your goods are located, where your business is established, and the value of the consignment. If you are UK-established and selling UK stock, you will usually deal with the VAT yourself based on the full amount the customer pays, not the amount left after TikTok deducts its fees.
If you sell from overseas or ship goods into the UK, TikTok may account for the VAT instead. The important thing is to understand which rule applies to each sale so you do not pay VAT twice, miss a registration requirement, or lose out on import VAT recovery.
Frequently Asked Questions
No. TikTok only accounts for VAT in specific marketplace situations, such as certain overseas shipments of £135 or less or where an overseas seller sells UK-held stock to UK consumers. UK sellers with UK stock normally remain responsible for their own VAT.
TikTok provides settlement and transaction information, but you should not rely only on payout figures to calculate VAT. VAT is based on your sales value before TikTok fees, so use your sales records and invoices to prepare your VAT return accurately.
Yes. The £90,000 VAT registration threshold applies to your total taxable turnover, not each platform separately. Sales from TikTok Shop, Amazon, eBay, Shopify, and other channels are combined.
Yes. Zero-rated sales still count towards the VAT registration threshold, even though you charge VAT at 0%. Exempt and out-of-scope sales generally do not count.
If you should have registered earlier, HMRC can backdate your VAT registration. You may need to pay VAT on past sales, plus interest and potentially a penalty for failing to notify HMRC.
Not always. Overseas sellers do not usually benefit from the £90,000 UK VAT threshold, but marketplace rules may mean TikTok accounts for VAT in certain situations. Registration may still be useful if you need to recover import VAT.
Yes. The location of your goods at the time of sale is one of the most important factors. Goods shipped from overseas, goods stored in the UK, and goods held in Northern Ireland can all have different VAT treatments.
Need Help With TikTok Shop VAT?
TikTok Shop VAT rules can be complex, especially when stock locations, overseas sales and VAT registration come into play.
