A UK Seller's Guide to VAT & Making Tax Digital
Shopify calculates VAT and now validates VAT numbers natively at checkout against HMRC's own database — but Shopify doesn't register you for VAT, decide if you should be registered, or file your return. This guide covers the registration threshold, VAT brackets, MTD filing, and what changed post-Brexit.
£90,000, Rolling 12 Months.
UK VAT registration is mandatory once turnover exceeds £90,000, tested on a rolling 12-month basis at the end of every month — not a fixed annual snapshot. A strong BFCM/Christmas quarter can push you over the threshold mid-year even if your annual total looked safe in January. Once registered, VAT applies at 20% standard rate, 5% reduced, or 0% zero-rated — and getting product categorization wrong is one of the more common Shopify VAT mistakes.
Calculates Tax. Doesn't File It.
| Task | Shopify |
|---|---|
| Calculate VAT at checkout | Yes — auto-calculated by bracket once configured |
| Validate EU/UK VAT numbers at checkout | Yes, as of Feb 2026 — real-time check against HMRC's database |
| Register your business for VAT | No — this is on you or your accountant |
| File your VAT return with HMRC | No — needs Xero/QuickBooks/Sage via Making Tax Digital |
What It Actually Requires
MTD requires digital record-keeping and direct API-based VAT return submission to HMRC — not a spreadsheet emailed to your accountant.
Configure Shopify Tax
Automatic VAT across 20/5/0% brackets with correct categorization.
Connect Xero/QuickBooks/Sage
MTD-compliant digital record-keeping.
EORI + IOSS/OSS
Registration for cross-border EU sales post-Brexit.
Submit via API
Returns direct through your accounting software's HMRC connection.
Re-check monthly
Track rolling 12-month turnover, not just annually.
Common Questions
Does Shopify register my business for VAT?
What is Making Tax Digital and do I need it?
What changed for UK sellers post-Brexit?
Get Your Setup Reviewed.
We'll check your Shopify Tax configuration, product categorization, and MTD connection, and flag anything misconfigured before HMRC does.
