Why Cross-Border Compliance is Different (and why general accounting isn’t enough)
Most accounting firms focus on “within-the-borders” compliance. They understand your local tax return, but they might not understand how a UK-based company storing goods in a German warehouse affects your VAT liability in France.
Cross-border accountancy requires a deep understanding of international treaties, import/export evidence, and digital tax thresholds. If you get it wrong, you face hefty fines, seized shipments, and banned seller accounts. If you get it right, you unlock a seamless global supply chain.
UK VAT (Post‑Brexit): the rules that decide what you charge and what you file
Brexit changed how goods move between the UK and EU. The UK VAT system now operates independently, and your VAT treatment depends heavily on where the goods are at the time of sale and the consignment value.
UK VAT (authoritative definition)
UK VAT is a consumption tax administered by HMRC. You must register and submit VAT Returns when required, charging VAT where the rules say your supply is taxable in the UK.
The £135 consignment rule (goods sold into the UK)
For goods sold to UK customers from outside the UK, the £135 threshold is critical:
- Consignments under £135: you usually charge UK VAT at checkout and pay it to HMRC via your VAT Return. This reduces delivery friction and avoids “surprise fees” for customers.
- Consignments over £135: VAT is typically handled at import (often collected by the courier), unless you use Postponed VAT Accounting (PVA) where applicable, improving cash flow.
EORI numbers: don’t ship without it
You can’t move commercial goods into or out of the UK without an EORI (Economic Operator Registration and Identification) number.
2026/27 tax year housekeeping (UK): keep your director/shareholder numbers clean
If you’re a UK company director taking salary and dividends, build these “housekeeping” checks into your monthly finance routine now. Doing this helps you avoid surprise personal tax bills and keeps your year-end filing smooth.
Key points to note for 2026/27:
- Personal allowance remains £12,570 (tax-free income band).
- Dividend allowance remains £500 (the first £500 of dividend income is taxed at 0%).
- Dividend tax rates on amounts over the £500 allowance are increasing by 2%:
- 10.75% for basic rate taxpayers
- 35.75% for higher rate taxpayers
What you should do (and why it helps):
- Track salary + dividends together, not separately, to avoid drifting into higher rates.
- Set aside personal tax monthly on dividend drawings over the allowance, to protect cash flow.
- Keep dividend paperwork tidy (board minutes/vouchers), to stay audit-ready.
Why specialist support matters in the UK
HMRC increasingly checks whether:
- VAT returns match marketplace and payment processor data
- import declarations align with your bookkeeping
- zero-rated exports have proper evidence
EU VAT: OSS, IOSS, and when you still need local registrations
The EU introduced OSS/IOSS to simplify consumer VAT reporting, but your obligation still depends on where stock is held and how goods enter the EU.
OSS (One Stop Shop) — authoritative definition
OSS is an EU reporting scheme that allows you to declare certain B2C sales across EU member states in a single return filed in one member state, instead of registering in every country for those specific sales.
Use OSS when:
- you sell B2C goods to customers in other EU countries, and
- you’re making supplies that qualify for OSS reporting
IOSS (Import One Stop Shop) — authoritative definition
IOSS is used for distance sales of imported goods into the EU with a value of €150 or less, allowing VAT to be charged at checkout. This prevents customers receiving import VAT demands on delivery, which protects conversion rates and reduces returns.
Key points:
- Benefit: charge VAT at checkout → fewer delivery issues and better customer experience
- Catch for non‑EU businesses: you generally must appoint an EU-based intermediary to use IOSS.
New EU change to watch: €3 customs duty on parcels under €150 (starts July 2026)
If you sell into the EU, build this into your pricing and customer messaging now.
From July 2026, the EU is introducing a €3 customs duty on small parcels under €150. This matters because €150 is also the IOSS value limit, so a large share of ecommerce shipments sits in this band.
What you should do (and why it helps):
- Update landed cost assumptions (product + shipping + VAT + duties/fees) now to protect margin.
- Review checkout messaging to reduce “surprise cost” complaints and chargebacks.
- Keep your IOSS and customs data clean (product values, HS codes, origin evidence) to minimise border delays.
Local EU VAT registrations: the “inventory location” rule
OSS does not remove the need for local registrations when you hold stock in an EU country.
You typically need a local VAT registration if you store inventory in that EU country.
