Dropshipping VAT depends on where your goods and customers are. Book a quick call and we'll untangle your specific supply chain.
The biggest myth in dropshipping is that holding no stock means having no VAT to worry about. In reality, dropshipping is one of the trickier ecommerce models for VAT, because the goods, the supplier and the customer can all be in different countries — and VAT follows the goods, not your warehouse.
This guide explains how VAT really works for UK dropshippers: the two separate supplies in every order, how the £135 import rule applies, who counts as the importer of record, and when you need to register.
Each supply has its own VAT treatment, decided by where the goods start, where they end up, and where each party is established. Once you map these two supplies, the rules fall into place.