Tax configuration is one of the most important post-migration tasks — a misconfigured tax setup can mean charging customers the wrong amount and creating a VAT liability. WooCommerce handles VAT via the built-in tax settings plus optional plugins (WooCommerce EU VAT Compliance, WooTax, TaxJar). Shopify has its own tax system (Shopify Tax) which handles most UK VAT requirements without a plugin, with some nuances to understand.

UK VAT rates

Rate	Applies to	Shopify configuration
Standard (20%)	Most goods and services	Default tax rate — applied automatically
Reduced (5%)	Children's car seats, domestic energy, women's sanitary products, some mobility aids	Override tax rate on specific products
Zero (0%)	Food (most), children's clothing, books, newspapers, prescriptions	Override to zero — or mark product as "Tax exempt"
Exempt	Financial services, insurance, postage stamps (not shipping)	Tax exempt product setting

Setting up UK VAT in Shopify

Shopify Admin → Settings → Taxes and duties
Under "Tax regions," click "United Kingdom"
Confirm your VAT registration status and VAT number (if registered)
Shopify Tax automatically applies 20% to standard-rated products in the UK region
Prices in Shopify can be shown inclusive or exclusive of tax — UK convention is prices inclusive of VAT for B2C stores

Inclusive vs exclusive pricing

In Settings → Taxes, enable "All prices include tax." This means the price you set on a product is the price the customer pays (VAT already included, as is UK convention). If you disable this, Shopify adds VAT on top at checkout — the price shown on the product page would be ex-VAT, which is unusual for UK consumer retail.

Zero-rated products

Common zero-rated categories relevant to UK ecommerce:

Books, newspapers, magazines: Physical printed books are zero-rated. E-books and digital publications are standard-rated at 20%.
Children's clothing: Clothing and footwear designed for children under 14 (broadly sized for those under 14) is zero-rated. Adult clothing is standard-rated regardless of whether adults buy it in small sizes.
Food: Most food for human consumption is zero-rated, with significant exceptions (crisps/snacks, confectionery, ice cream, sports drinks, alcoholic drinks — all standard-rated).
Supplements and vitamins: Generally standard-rated, but some food supplements qualify for zero rating. Verify with HMRC guidance per product.

To set a product as zero-rated in Shopify: edit the product → Pricing section → uncheck "Charge tax on this product." This makes the product fully tax-exempt (0% tax).

To apply a reduced rate (5%): Shopify Admin → Settings → Taxes → United Kingdom → click on the 20% rate to edit it → add a product override at 5% for specific products or collections.

UK VAT registration threshold

If your turnover is below £90,000 (2024 threshold), you are not required to register for VAT. If your WooCommerce store was below the threshold, you may not have been charging VAT at all. When migrating to Shopify, ensure your tax configuration matches your registration status:

Not VAT registered: set all products to tax-exempt in Shopify. Do not charge VAT.
VAT registered: enter your VAT number in Shopify tax settings and ensure correct rates are applied.
Approaching threshold: plan the VAT registration and configure Shopify before you exceed the threshold.

EU VAT after Brexit

Since Brexit, UK stores selling to EU customers must handle EU VAT differently:

Orders under €150: EU Import One Stop Shop (IOSS) scheme allows UK merchants to collect and remit EU VAT at point of sale. Without IOSS, the customer pays VAT on import.
Shopify Markets: Shopify's built-in international selling tool can calculate and collect EU VAT for orders under €150 if you are registered for IOSS. Configure in Shopify Admin → Settings → Markets → EU.
Orders over €150: Duties and taxes are assessed on import — the customer or your freight provider handles this.

Replacing WooCommerce tax plugins

WooCommerce plugin	Shopify equivalent
WooCommerce built-in tax (manual rate tables)	Shopify Tax (native) — handles UK and EU automatically
WooCommerce EU VAT Compliance	Shopify Markets + IOSS registration
TaxJar for WooCommerce	TaxJar for Shopify (if selling to US states)
Taxamo Assure	Quaderno for Shopify (invoicing + VAT compliance)

Post-migration tax checklist for UK stores

UK tax region configured in Shopify with correct VAT registration status
"All prices include tax" enabled for B2C UK stores
VAT number entered in Shopify tax settings (if VAT registered)
Zero-rated products identified and marked tax-exempt (books, children's clothing, qualifying food)
Reduced-rate (5%) products identified and overridden (children's car seats, sanitary products)
Test: add a standard product to cart, confirm 20% VAT shown at checkout
Test: add a zero-rated product, confirm no VAT charged
EU orders: Shopify Markets configured if selling to EU post-Brexit
Invoice/receipt: Sufio or Sufio-equivalent configured if VAT invoices required

Shopify tax settings after migrating from WooCommerce: UK guide (2026)