Since the UK left the EU single market and customs union at the end of 2020, running an ecommerce business has meant getting to grips with a new trading reality. If you sell online, the changes affect everything from how you despatch parcels to the VAT you charge and the product labels you need. Here is what UK online retailers need to know now.

The UK ecommerce landscape today

UK ecommerce remains one of the most developed markets in the world. Office for National Statistics figures show that online sales accounted for roughly a quarter of total retail spending in 2023, with consumers spending an estimated £140 billion online. The sector has matured since the pandemic-driven surge, but it is still growing. Cross-border sales, however, are no longer as straightforward as they were under the Single Market.

For many small businesses, the EU was the obvious first export market. Today, that market comes with customs declarations, VAT obligations and product-compliance checks that did not exist before 2021. The businesses that have adapted best are those that treat post-Brexit compliance as part of their normal operations rather than an afterthought.

Customs, duties and VAT

Goods moving between Great Britain and the EU are now treated as imports and exports. That means you generally need an EORI number, accurate commodity codes and commercial invoices for each shipment. If your goods qualify for preferential zero tariffs under the UK-EU Trade and Cooperation Agreement, you must prove they meet rules-of-origin requirements. Without the right paperwork, your customer may be charged duty at the border.

VAT has also changed. Exports from the UK to the EU are usually zero-rated for UK VAT, but you must keep evidence that the goods have left the country. Imports into the UK from the EU are subject to UK VAT, although most businesses can use postponed VAT accounting so the VAT is paid on their VAT return rather than at the border.

If you sell directly to consumers in the EU, you may need to register for EU VAT. The EU Import One-Stop Shop (IOSS) lets you collect VAT on consignments worth up to €150 at the point of sale, making delivery smoother for the customer. Above that threshold, or if you do not use IOSS, the buyer usually pays VAT and any duties before the parcel is released.

Product rules and the Country of Origin principle

One of the biggest shifts is the loss of the EU Country of Origin principle. Before Brexit, a UK-based online retailer typically only had to comply with UK rules when selling to customers elsewhere in the EU. Now, UK sellers must follow the laws of each EU or EEA member state in which they trade. That covers consumer contracts, marketing, product compliance, packaging, environmental rules and data protection.

Product marking is a case in point. Most goods placed on the market in Great Britain now need the UKCA mark, although the government has confirmed that CE marking will continue to be recognised for many products indefinitely. Northern Ireland has its own arrangements under the Windsor Framework, so products sold there may need CE or UKNI marking depending on the route to market. From December 2024, the EU General Product Safety Regulation also tightens requirements for products sold to EU consumers, including traceability and safety-documentation obligations.

Selling to Northern Ireland and the Republic of Ireland

Northern Ireland occupies a unique position. Under the Windsor Framework, goods that stay within the UK internal market can move from Great Britain to Northern Ireland using a simplified green lane process, with no customs duty and minimal paperwork. Goods at risk of moving into the EU still use the red lane and full EU customs procedures.

If you sell from Great Britain to Northern Ireland, you should register for the UK Internal Market Scheme (UKIMS) if you want to declare goods as not at risk. Many ecommerce businesses also use fulfilment centres in the Republic of Ireland or mainland Europe to avoid repeated border friction for EU customers. Our Northern Ireland trade guide explains the basics in more detail.

Currency, costs and customer experience

Sterling has been volatile since the 2016 referendum, and import costs have risen for many retailers. Shipping to the EU now takes longer and costs more because of customs checks and additional administration. Sectors with historically high return rates, such as fashion and footwear, have found cross-border returns particularly expensive. It is worth reviewing your returns policy, delivery pricing and whether you absorb duties or pass them to the customer.

Transparency helps conversion. Displaying the likely landed cost—product price, shipping, duties and VAT—at checkout reduces unpleasant surprises and abandoned baskets. Some retailers have shifted focus towards the UK market while they build the systems and partnerships needed to trade efficiently with the EU again.

Turning friction into opportunity

Brexit has not ended cross-border ecommerce, but it has raised the barrier to entry. Businesses that invest in compliance, clear pricing and reliable logistics can still compete. There are also opportunities closer to home: a large, digitally savvy UK customer base, new trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which entered into force for the UK in December 2024, and growing demand for sustainable, locally sourced products.

Practical steps to take now include:

• auditing your supply chain and supplier contracts;
• checking product labelling and conformity documentation;
• registering for IOSS if you sell B2C into the EU;
• speaking to a customs broker or freight forwarder about your shipments;
• reviewing your website terms, returns policy and checkout for EU customers; and
• keeping your ecommerce platform updated with the correct VAT and duty settings.

Keeping your checkout, despatch and returns processes aligned with the new rules will help protect your margins and your reputation.

The post-Brexit trading environment is complex, but it is manageable. By staying informed and treating compliance as a core part of your business strategy, you can keep your online store competitive at home and abroad.