News Flash (Feb 2026): Key compliance shifts you can’t ignore
- Canada (CRA login security): From February 2026, CRA online services require a backup multi-factor authentication (MFA) method to stay in your account and avoid getting locked out during filing season.
- Canada (platform economy GST/HST): If you sell via (or run) a platform model like Airbnb/Uber, crossing $30,000 CAD can trigger GST/HST registration and collection obligations.
- USA (platform reporting): In the US, keep a close eye on Form 1099-K reporting rules for payments processed by third‑party platforms/processors—this affects your bookkeeping and year-end matching.
Keep reading. We’ll show you exactly what to set up, what to track, and how to stay compliant on both sides of the border.
Expanding your UK Limited Company into North America is a major milestone. The USA and Canada offer massive consumer bases and a shared language, making them the natural next steps for ambitious brands. However, moving goods across the Atlantic introduces a complex layer of tax obligations.
Many sellers assume that North American tax works like UK VAT. It doesn’t. While the UK has a unified Value Added Tax system, the USA and Canada use different models entirely. Navigating cross border VAT and North American sales taxes requires a shift in mindset.
At Sterlinx Global, we act as your global tax compliance suite. We take your data and turn it into completed filings, ensuring you remain compliant while you focus on scaling. This guide breaks down exactly what you need to know about tax when selling in the USA versus Canada.
Understanding the UK Side: Zero-Rating Your Exports
Before you worry about the IRS in America or the CRA in Canada, you need to handle your UK obligations. When you export goods from the UK to a country outside the UK and EU, those sales are generally zero-rated for VAT.
This means you do not charge 20% VAT to your American or Canadian customers. However, you must keep thorough evidence of the export: such as commercial invoices and shipping documents: to prove the goods left the country. Failing to maintain these records could lead to HMRC demanding the VAT you didn’t charge.
You should also ensure your VAT invoices are correctly formatted for international trade. For more on managing your local obligations, check out our UK tax tips to run your business accounting.
Navigating the USA: It’s Not VAT, It’s Sales Tax
The biggest shock for UK sellers entering the US market is the lack of a federal VAT. Instead, the USA uses a Sales Tax system managed at the state and local levels. There are over 11,000 different tax jurisdictions in the US, each with its own rates and rules.
What is Nexus?
In the US, your obligation to collect and remit sales tax is triggered by “Nexus.” Nexus is a connection between your business and a state.
- Physical Nexus: Having an office, employees, or inventory in a warehouse (like Amazon FBA) in a specific state.
- Economic Nexus: Reaching a certain threshold of sales or transactions in a state (e.g., $100,000 in sales or 200 transactions in a calendar year).
Once you trigger Nexus, you must register for a Sales Tax Permit in that state and start collecting tax from customers. Don’t worry; we handle the registration and ongoing filings for you, so you don’t have to keep track of 50 different state deadlines.
Marketplace Facilitator Laws
If you sell via Amazon, eBay, or Walmart, your life is slightly easier. Most US states have “Marketplace Facilitator” laws. This means the marketplace collects and remits the sales tax on your behalf. However, you may still have a requirement to register and file “zero-returns” in certain states to stay fully compliant.
1099-K Reporting: Track platform payouts (2026 watch-out)
Even when a marketplace collects sales tax, you still need clean records for US income reporting. Payment platforms can issue Form 1099-K, which reports gross payments processed (before refunds and fees).
2026 note: Many sellers talk about a $5,000 threshold. However, for tax year 2026, IRS guidance has moved back to the >$20,000 AND >200 transactions threshold for Form 1099‑K. Regardless of whether you receive a form, your income is still taxable—so keep your payout reports, fees, and refunds reconciled to avoid mismatch notices.
Cracking the Canadian Code: GST, HST, and PST
Canada’s system is a hybrid that feels a bit more familiar to UK sellers but has its own traps. Canada uses three types of sales taxes:
- GST (Goods and Services Tax): A 5% federal tax applied nationwide.
- HST (Harmonized Sales Tax): A combined federal and provincial tax (usually 13% or 15%) used in provinces like Ontario and New Brunswick.
- PST/QST (Provincial Sales Tax): Separate provincial taxes applied in provinces like British Columbia, Saskatchewan, and Quebec.
The $30,000 Threshold
Generally, if your worldwide revenues stay below $30,000 CAD in a single calendar quarter or over four consecutive quarters, you may be considered a “small supplier” and might not need to register for GST/HST immediately. However, once you cross that threshold, registration is mandatory.
Platform economy update (Airbnb/Uber-style models): GST/HST can apply once you exceed $30,000 CAD
If your business is involved in platform-based selling or services (think short‑term accommodation, ridesharing, delivery, or other platform‑facilitated services), you must treat the $30,000 CAD threshold seriously.
Do this to stay compliant:
- Monitor your rolling revenue so you know exactly when you exceed $30,000 CAD.
- Register for GST/HST promptly once you exceed the threshold, so you can charge/collect correctly and avoid penalties.
- Separate platform fees and payouts in your bookkeeping, because GST/HST is driven by taxable supplies and place‑of‑supply rules.
This is why structured bookkeeping matters. If your data is messy, you can miss the crossing point and end up with a retroactive GST/HST exposure.
CRA security enhancement (Feb 2026): mandatory backup MFA for CRA accounts
From February 2026, CRA sign-in services require a backup multi-factor authentication (MFA) option for CRA accounts (e.g., My Business Account). Set this up now so you don’t get locked out when you need to file, update GST/HST, or respond to CRA messages.
Trucking industry reporting (Canada): T4A deadline for 2025 fees paid
If you operate in the trucking industry in Canada (or pay for trucking services through a Canadian operation), note the CRA reminder that T4A reporting for certain “fees for services” paid in 2025 is due by February 28, 2026. Because February 28, 2026 falls on a Saturday, CRA guidance treats the deadline as March 2, 2026 if received/postmarked by then. Missing it can trigger penalties, so keep your records organized.
