DDP to the UK?

Et billede af en telefonboks i England.

It’s more expensive than you think – and often not legal.

More and more foreign companies are selling directly to British consumers by adding 20% to the price to “cover the VAT,” then shipping the goods DDP (Delivered Duty Paid). It sounds simple. It doesn’t hold up. And what actually goes wrong depends on the value of the goods.

Under £135: a compliance failure

For goods valued at £135 or less, UK VAT must be charged and accounted for at the point of sale – not at the border. That requires a UK VAT registration.

Add 20% to the price without being registered, and that £20 on a £100 item isn’t a settled tax. It’s an unrecorded liability sitting on the books. If HMRC catches it, the company can face a claim for VAT on every past sale – plus interest and penalties.

Over £135: an economic leak

Above this threshold, normal import rules apply. Without a UK VAT registration, import VAT can’t be reclaimed. It’s a straight cost.

Here’s what that looks like on a £1,000 item, sold for £1,200 with the 20% markup, at 12% duty:

  • Customs value: £1,000
  • Duty (12%): £120
  • Import VAT (20%, on value + duty): £224
  • Disbursement fee: ~£15
  • Freight forwarder’s invoice: ~£359

The £200 added to “cover the VAT” doesn’t even cover two-thirds of the real cost. And if the full £1,200 sales price is used as the customs value by mistake, the bill climbs even higher.

The fix is the same either way

A UK VAT registration.

Under £135, it makes the sale compliant. Over £135, it makes the import VAT recoverable through Postponed VAT Accounting (PVA) – which doesn’t require a UK establishment, just a VAT and importer registration.

DDP is a strong model for the UK market. But the delivery term doesn’t solve the VAT obligation – it sits next to it, not in place of it.

Already shipping DDP to the UK? It may be worth checking whether your setup actually complies with the rules and holds up on the margin – or just looks like it does.

Sources