Shopify changed how it calculates UK VAT for orders shipping to Great Britain, according to its changelog entry dated October 23, 2026. VAT is now worked out from the fulfillment location your order routing picks for each order, which can mean some orders over £135 no longer carry VAT at checkout.

What’s new

Shopify says VAT on orders shipping to customers in Great Britain now follows the fulfillment location chosen by your order routing settings. That’s the same way Shopify already calculates tax for orders shipping to the United States.

The rule that matters: if an order totals more than £135 before tax and shipping and is routed to a location outside the UK, Shopify treats it as an import and doesn’t charge VAT at checkout. Shopify says this applies even if your store also has a UK location.

Shopify lists three things that aren’t affected:

  • orders of £135 or less;
  • orders shipping to Northern Ireland;
  • existing orders.

Who it affects

Shopify stores that sell to Great Britain and fulfill at least some orders from outside the UK. That includes US, Canadian, EU and Australian brands with a UK warehouse plus a home-country warehouse, and stores using overseas fulfillment partners or print-on-demand suppliers.

A store that ships everything from inside the UK won’t see a change. A store that ships everything from abroad was already in import territory for larger orders, but should still check what customers are told at checkout about duties and VAT on delivery.

Our take

The risk here is a customer in Great Britain paying for a high-value order, then getting an import VAT bill from the courier they didn’t expect. That leads to refused parcels and refund requests. We’d check order routing this week: place a test order over £135 to a GB address and see which location it routes to. If you want VAT charged at checkout, Shopify says to route those orders to a UK location or collect duties and import taxes at checkout. Either way, update your shipping and returns pages so UK buyers know what to expect.

Our Shopify development team can review routing and checkout settings for UK sales. For your wider store setup, see our Shopify store setup checklist.

Source: Shopify Changelog, More accurate UK VAT based on fulfillment location