Dropshipping VAT depends on where your goods and customers are. Book a quick call and we'll untangle your specific supply chain.
That's what makes dropshipping one of the trickier ecommerce models for VAT. A supplier in China shipping to a UK customer, or to an EU one, can trigger very different obligations — and an unexpected VAT or import VAT bill on a £40 product can wipe out the profit on the sale entirely, before you've even covered ad spend.
This guide explains how VAT really works for UK dropshippers, in plain English: the two separate supplies in every order, how the £135 import rule applies, who counts as the importer of record, and when you actually 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.