To ship to the UK and EU from a US Shopify store, you charge UK VAT at checkout on UK orders of £135 or less and use IOSS to charge EU VAT at checkout on orders up to €150. Since 1 July 2026, EU orders of €150 or less also owe €3 duty per item line, and since 1 November 2026 a €2 handling fee per line applies at any order value (European Commission). A setup built before 2026 can now leave your customers with a bill at the door.
Register for UK VAT and charge it at checkout on UK orders of £135 or less, appoint an EU intermediary for IOSS so you can charge EU VAT on orders up to €150, and ship DDP so customers pay nothing on delivery. Budget €5 per item line for EU low-value orders. Shopify Managed Markets replaces both registrations for a per-order fee, because Global-e becomes the merchant of record.
What changed for UK and EU orders in 2026?
The EU removed its €150 customs duty exemption and replaced it with a flat €3 duty per item from 1 July 2026, then added a €2 handling fee per item from 1 November 2026. The UK still charges no customs duty on consignments of £135 or less, but it has confirmed that relief will end by October 2028 at the latest (Council Regulation (EU) 2026/382, GOV.UK).
| Rule (as of November 2026) | United Kingdom | European Union |
|---|---|---|
| Low-value threshold | £135 per consignment, goods value only | €150 per consignment, intrinsic value only |
| VAT on low-value orders | Seller charges UK VAT at checkout and pays HMRC | Seller charges destination-country VAT at checkout through IOSS, or the buyer pays import VAT |
| Customs duty on low-value orders | None while the £135 relief lasts | €3 per item line, 1 July 2026 to 1 July 2028 |
| Per-item handling fee | None | €2 per item line from 1 November 2026, at any order value |
| Next scheduled change | £135 duty relief removed by October 2028 at the latest | Normal tariff rates replace the €3 duty after 1 July 2028 |
| Orders above the threshold | Import VAT and customs duty at the border | Import VAT and normal customs duty at the border, plus the €2 fee |
The Commission also had to assess by 1 October 2026 whether the €3 duty is diverting trade, and by 1 December 2027 whether its customs data hub will be ready to charge normal rates in July 2028. If the hub isn't ready, the flat duty can be extended. Treat both dates as points where the rules can change again (Commission guidance, 5 October 2026).
How does the UK £135 rule work for a US Shopify brand?
If a UK order ships from the US and the goods are worth £135 or less, you have to register for UK VAT, charge VAT at checkout and account for it to HMRC. Above £135, normal import VAT and customs rules apply at the border instead (HMRC).
- The £135 test uses the intrinsic value of the whole consignment: the price of the goods without transport and insurance (unless they're part of the price and not shown separately) and without other taxes and charges.
- Add the values of every item in one parcel together. Each parcel is its own consignment, so a split can move an order from one rule to the other. Our Shopify app supports split shipments, and on UK orders that's a setting to agree with your tax adviser before any 3PL starts splitting parcels.
- Sales to UK VAT-registered businesses use the reverse charge: collect and check their VAT number, note the reverse charge on the invoice, and don't charge VAT.
- HMRC registers you at your principal place of business, which can't be a mail forwarding or registered office address, and expects VAT records kept for 6 years.
- If you also sell through a marketplace, the marketplace is liable for UK VAT on those £135-or-less consignments. Your own Shopify store isn't a marketplace, so the obligation on store orders stays with you.
The standard rate is 20%, but some goods are reduced or zero-rated (children's clothes and most food are zero-rated), so map each SKU to its UK VAT rate before you turn on UK checkout. For orders above £135, either ship DDP and pay import VAT and duty yourself, or ship DAP and the carrier collects them from your customer with its own clearance charge. Surprise charges at the door lead to refused and returned parcels, which is why Shopify ships Managed Markets orders DDP to most destinations.
Do US Shopify brands need IOSS to ship to the EU?
IOSS is optional, but without it your EU customers pay import VAT at delivery on every order. A US seller can only use IOSS by appointing an EU-established intermediary, who registers you, files the IOSS VAT returns and is liable for the VAT obligations on your behalf (European Commission, VAT One Stop Shop).
- IOSS covers distance sales of goods in consignments with an intrinsic value of €150 or less. It doesn't cover goods subject to excise duties, such as alcohol and tobacco.
- You charge the VAT rate of the customer's country. Standard rates run from 17% in Luxembourg to 27% in Hungary, with Germany at 19% and France at 20% (Your Europe, rates last checked 13 July 2026).
- Your IOSS number travels in the electronic customs data for each EU parcel. Orderfy WMS, the proprietary system we built in-house, adds it to the customs data on every EU order we ship.
- Above €150, IOSS doesn't apply. Import VAT and the normal customs duty rate for the product are due at import, plus the €2 handling fee.
Without IOSS, the declaration is lodged in the destination country and import VAT is collected at import. You can still ship those orders DDP through a carrier that bills duties and taxes to you, but each parcel clears on its own, and for non-IOSS imports DHL Express notes that the €2 handling fee is added to the base used to calculate import VAT (DHL Express).
What do the EU €3 duty and €2 handling fee cost per order?
Each EU order of €150 or less pays €3 duty plus a €2 handling fee for each item line on its customs declaration: €5 for a one-product order and €10 for a two-product order. An item line groups goods with the same tariff classification, description and origin, regardless of quantity (Commission guidance).
| Example parcel (illustrative) | Item lines | €3 duty | €2 handling fee | Total per order |
|---|---|---|---|---|
| 3 identical t-shirts | 1 | €3 | €2 | €5 |
| 1 t-shirt and 1 hoodie (different tariff codes) | 2 | €6 | €4 | €10 |
| Candle, mug and tote bag (3 different tariff codes) | 3 | €9 | €6 | €15 |
| Order worth €180 (above €150) | 2 | Normal duty rate instead | €4 | Duty at normal rate plus €4 |
Because the Commission's guidance applies the duty and fee per declaration line, HS codes decide the bill: two near-identical products classified under different codes double the charge. Customs data also got stricter on 1 November 2026, when every business-to-consumer parcel into the EU started needing product identifiers: a merchant ID such as your SKU, a manufacturer code such as a model or style number, and a GTIN, UPC or EAN where one exists. Missing identifiers can mean delays, inspections or parcels returned to origin (USPS, DHL Express).
Should you ship DDP or DAP to the UK and EU?
Ship DDP (delivered duty paid) when you want the customer to pay nothing at delivery, which suits a Shopify brand at volume. Ship DAP (delivered at place) only when the order total is low, customers expect to pay on arrival, and you accept a higher refusal rate.
| Question | DDP | DAP |
|---|---|---|
| Who pays duty, import VAT and fees | You, collected from the customer at checkout or absorbed in price | The customer, at delivery |
| Carrier clearance charge | Billed to you | Billed to the customer on top of taxes |
| Customer experience | Total known at checkout | Bill at the door; parcels can be refused |
| UK orders of £135 or less | VAT already charged at checkout either way | VAT still charged at checkout; DAP only shifts carrier fees |
| EU orders of €150 or less with IOSS | VAT, €3 duty and €2 fee settled before arrival | IOSS imports are declared by the IOSS holder or its representative, so duty and fees sit with the seller side |
| Shopify setting | Duties and import taxes collected at checkout, DDP labels required | No duty collection for that country |
Shopify lets you choose DDP or DAP for each country, but not both for the same country (Shopify Help Center). Once duties are collected at checkout, every order to that country has to ship on a DDP label, or the customer pays twice. We can ship DDP on UPS, FedEx or DHL, so duties and taxes are paid before delivery. Our USPS international labels ship DDU (delivered duty unpaid), so USPS fits only the countries you leave on DAP.
How do Shopify Markets and Managed Markets collect duties and VAT?
Shopify gives you two routes: collect duties and import taxes at checkout and stay the merchant of record, or use Managed Markets, where Global-e becomes the merchant of record and handles tax registration, remittance and customs paperwork for a per-order fee (Shopify Help Center).
| Question (as of November 2026) | Duties and import taxes at checkout | Managed Markets (Global-e) |
|---|---|---|
| Merchant of record | Your company | Global-e |
| UK VAT and EU IOSS registration | You register (IOSS through an EU intermediary) | Not needed; Global-e holds the registrations |
| Shopify fee | 0.85% per order with Shopify Payments, 1.5% with other gateways, when the temporary lower fee isn't in effect | 3.25% on Shopify Plus, 3.5% on Basic, Grow and Advanced, plus currency conversion fee |
| DDP labels bought in Shopify | DHL Express and DHL eCommerce | DHL Express, DHL eCommerce, UPS and FedEx for US stores |
| Duty guarantee | Checkout amount is an estimate | Checkout amount guaranteed; differences covered |
| Works with a 3PL | Yes, if the 3PL ships DDP on a carrier you can bill duties to | Through listed compatible fulfillment services, labels bought in the Shopify admin, or a partner integration with Shopify label purchasing |
Duty collection at checkout needs HS codes and a country of origin on each product, doesn't work with Shopify Fulfillment Network, and is charged on every order where duties are calculated, even when the amount is zero (Shopify Help Center).
Managed Markets has rules your 3PL has to follow: one shipping label per product per order (a single product can't be split across shipments), a unique label and tracking number for every package, no order edits after a label is bought, and a short hold on each new order for fraud and address checks. Refunds for duties, customs fees and VAT aren't available after fulfillment (Shopify Help Center).
Which carriers can ship DDP to the UK and EU from a US 3PL?
USPS, DHL Express, DHL eCommerce, UPS and FedEx can all carry DDP parcels from the US, but each has limits on how the label has to be bought. The table shows what's documented as of November 2026.
| Carrier and service | DDP to UK and EU | What to check |
|---|---|---|
| USPS First-Class Package International, Priority Mail International, Priority Mail Express International | Yes, through USPS DDP to the UK and listed EU countries, including Germany, France, the Netherlands, Spain, Italy and Sweden | Only via Click-N-Ship, certain USPS APIs or Global Shipping Software; not for mailers who generate their own manifests; provider fee included in the quote |
| DHL Express | Yes, including DDP labels in Shopify | DHL charges the €2 EU handling fee to whoever pays duties, as a separate invoice line |
| DHL eCommerce Parcel International Direct | Yes, in Shopify and Managed Markets | Parcel International Standard is DAP only |
| UPS and FedEx | Yes, as Managed Markets labels for US stores | Outside Managed Markets, we can ship DDP on both |
Sources: USPS prepaid import duties, Shopify DDP labels, Shopify DHL eCommerce, Shopify Managed Markets fulfillment, DHL Express. International postage follows the same weight and size logic as domestic parcels, so the dimensional weight and carrier surcharge rules still decide much of the label cost.
Whichever carrier you pick, a missing UK or EU parcel starts with one question: did the carrier ever have it? Our staff photograph carts on the shipping floor, and in Orderfy WMS the order page shows "Handed to [carrier]" with the time and a strip of photos under the parcels.
What does UK and EU shipping cost at 500 orders a month out of 10,000?
At 250 UK and 250 EU orders a month, taxes and EU charges in this example come to about £4,200 and €7,000 a month before postage, and most of that is VAT your customers pay. The example is illustrative: the order values and product mix are assumptions, not Orderfy rates or quotes. Postage is excluded because it depends on weight, size and carrier contract.
| Line (illustrative example) | UK: 250 orders a month | EU: 250 orders a month (Germany) |
|---|---|---|
| Assumed goods value per order | £80, 1 product line | €90, 2 product lines |
| VAT charged at checkout per order | £16.00 (20%) | €17.10 (19%, through IOSS) |
| Customs duty per order | £0 while the £135 relief lasts | €6.00 (€3 x 2 lines) |
| EU handling fee per order | Not applicable | €4.00 (€2 x 2 lines) |
| Shopify duty collection fee at 0.85% of goods plus tax and duty | £0.82 on £96.00 | €1.00 on €117.10 |
| Monthly VAT remitted | £4,000 | €4,275 |
| Monthly duty, EU fee and Shopify fee | £204 | €2,749 |
| Managed Markets fee instead, 3.25% on Shopify Plus | £3.12 per order, £780 a month | €3.81 per order, €952 a month |
VAT is the largest line. It's a pass-through if your prices show it at checkout, and a margin cost if you hold tax-inclusive prices at US levels. The EU's €10 on a two-line parcel is fixed, so it's 25% of a €40 order and about 7% of a €140 order. Managed Markets costs more per order in fees here, but it replaces the UK VAT registration, the IOSS intermediary and the monthly filings, so compare it against your adviser and intermediary quotes rather than against zero.
Run the same math on your own mix before you set international shipping rates or a free shipping threshold for UK and EU customers.
What to check with your 3PL before you turn on UK and EU shipping
Customs data, DDP carriers and billing decide whether parcels clear without a charge at the door, so settle them before your first international order ships. Orderfy WMS builds the customs declaration on every international label from your Shopify product data: HS code, country of origin, description and value. The duties, taxes and carrier fees we prepay on DDP shipments, on UPS, FedEx or DHL, show on your weekly invoice, on the order they belong to. The points below depend on your 3PL's setup, and each comes with what a good answer sounds like.
- Can the WMS send EU product identifiers (SKU, manufacturer code and GTIN or UPC) for every EU consumer parcel? A good answer names the fields it sends and the carriers that receive them.
- Does your 3PL work with Shopify Managed Markets? A good answer names the route: a listed compatible fulfillment service, labels bought in the Shopify admin, or a partner integration with Shopify label purchasing.
- When does an order split into more than one parcel? A good answer: only when you've agreed it, with UK and EU orders kept together so consignment values stay as charged at checkout.
- How are UK and EU returns handled? A good answer covers who buys the return label and what happens to duties already paid.
What Orderfy covers and what stays with you
We ship to the UK, the EU and every other country our carriers support from our warehouse in the center of the US, with orders arriving from our native Shopify app within minutes and tracking posted to Shopify as soon as the label is created. If you also keep stock with a UK or EU warehouse, we set Orderfy WMS to take only the orders Shopify routes to our location. VAT and IOSS registration and the merchant-of-record choice stay with you, your tax adviser, your IOSS intermediary or Managed Markets. We're not the right fit if most of your volume ships to the UK or EU and you need stock inside those markets for local delivery.
Frequently asked questions
Consignments of £135 or less currently pay no UK customs duty, but UK VAT is still due and the seller charges it at checkout. The UK government has said the duty relief will be removed by October 2028 at the latest (GOV.UK).
An IOSS number shows EU customs that VAT on a parcel of €150 or less was collected at checkout, so the customer isn't charged import VAT at delivery. The number travels in the carrier's electronic customs data. A US seller gets one through an EU-established intermediary.
For UK consumer orders of £135 or less shipped from the US, yes: HMRC requires a UK VAT registration. For the EU, IOSS is optional, but without it your customers pay import VAT at delivery. Managed Markets removes both registrations because Global-e is the merchant of record.
No, in most cases. Both limits use the intrinsic value of the goods, which excludes transport and insurance unless they're included in the price and not shown separately on the invoice, and excludes other taxes and charges.
Yes. The €3 duty only applies to consignments of €150 or less, but the €2 handling fee applies per item line to business-to-consumer distance sales of any value from 1 November 2026, and it isn't temporary (Commission guidance).
Get a quote from Orderfy
If UK and EU orders are part of your plan, get a quote and include your markets, monthly UK and EU orders and Shopify duty settings.
Sources
- HMRC, Charging VAT on goods sold direct to customers in the UK (last updated 30 January 2026)
- HMRC, VAT and overseas goods sold to customers in the UK using online marketplaces
- HM Revenue and Customs, Reforming the customs treatment of low value imports into the UK (13 July 2026)
- EUR-Lex, Council Regulation (EU) 2026/382 of 11 February 2026
- European Commission, The temporary EUR 3 customs duty and the Union handling fee: guidance for Member States and trade (version of 5 October 2026)
- Council of the EU, EU action on the influx of small parcels (September 2026)
- European Commission, VAT One Stop Shop and import scheme (IOSS)
- Your Europe, VAT rules and rates (last checked 13 July 2026)
- Shopify Help Center, Collecting international duties and import taxes at checkout (checked November 2026)
- Shopify Help Center, Considerations for charging duties and import taxes at checkout (checked November 2026)
- Shopify Help Center, Buying DDP shipping labels (checked November 2026)
- Shopify Help Center, Overview of Managed Markets (checked November 2026)
- Shopify Help Center, Fulfilling and managing Managed Markets orders (checked November 2026)
- Shopify Help Center, Shipping with DHL eCommerce on Managed Markets (checked November 2026)
- USPS, Prepaid import duties (USPS DDP) and EU duties and fees (checked November 2026)
- USPS, Product identifiers for EU shipments (checked November 2026)
- DHL Express, Customs regulatory updates: Europe (checked November 2026)