Apprehending any kind of tax regulations for any given commercial niche is a challenge. However, in the case of print on demand taxes, the rules are especially enigmatic and convoluted.

Print on demand enables print sellers to use external printing services to print-to-order their t-shirts, posters, artworks or other print goods without the need for/costs of bulk orders or expensive in-house printing equipment.

Offering them the chance to sell their products online all over the world with the advent of outsourced fulfilment and shipping services. This is of course a great thing for e-commerce print businesses.

However it also incurs an amount of extremely arduous and confusing tax administration, which can be frustrating for beginner print on demand business owners.

In this article we’ll try to break down the key requirements for print on demand businesses, so you can leap over hot-off-the-press tax hurdles. 

What taxes do print on demand businesses have to pay/charge?

There are several forms of tax you may be required to both pay and collect (collect meaning charge to the customer then pay it to HMRC). 

They can include:

• Income Tax
• National Insurance (NI),
• VAT,
• Corporation Tax,
• and different sales tax or custom duties.

Tax obligations for print on demand gets quite complex when we start looking at international selling. We’ll explore each aspect of this in depth. 

Income Tax & National Insurance

Print on demand sellers who are sole traders are typically required to pay income tax just the same as any employed/self-employed individual. Except you are not paid through the PAYE system. Here’s a quick overview of the income tax rates:

*Scottish income tax rates differ. See the 2024/25 rates here.

Like all self-employed individuals, you’ll pay Class 4 National Insurance via Self Assessment, depending on your profits. 

If your profits are over £6,725 your Class 2 contributions are treated as if they have already been paid by HMRC, as to protect your National Insurance record.

Please note: the vast majority of print on demand sellers are sole traders, but if you operate as a Ltd company then you will pay corporation tax instead of income tax.

VAT/Sales Tax

If you are a UK business with a turnover of £90,000, or know that it will exceed £90,000 in any given 12 month period, then you must register for VAT and collect/charge 20% VAT on your sales, and shipping if you charge for it. You will also have to pay VAT on your B2C fulfilment orders. 

B2B sales of print on demand goods like bulk orders of supplies to a business are not subject to VAT.

Whether you operate as a sole trader or Ltd company you will have the same VAT requirements. To calculate VAT rates for different goods see HMRC’s guide.

Let's look at the VAT you have to collect or pay at each step of supply from production to sales.

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Online selling platforms make VAT easier (mostly)

The majority of online marketplaces like eBay, Amazon, Etsy and Shopify will automatically calculate and apply VAT to your sales for you. Plus some popular print fulfilment services are integrated with these platforms, making the whole VAT process much simpler. 

If you sell printed goods worth £135 or less that are located outside the UK at the point of sale then the marketplace is responsible for charging VAT to the customer. For goods over £135 normal VAT and customs rules will apply. 

If you are selling to customers in the UK and the goods are located in the UK at the point of sale (i.e you have imported them before selling) then you must pay any import VAT and duty when the goods are first imported. But the platform is usually still responsible for collecting VAT from the customer when they are sold. 

If you use a UK based print on demand service for fulfilment you will be charged 20% VAT on your orders.

We highly recommend asking your online marketplace for advice. Learn more about VAT and duty costs for selling via marketplaces here.

Selling and importing

Selling within the UK

Most printed goods, irrespective of value, sold within the UK by VAT registered print on demand businesses are subject to 20% VAT at the point of sale, shipping and fulfilment: 

• You collect/charge 20% VAT when you sell the product to the customer (point-of-sale)
• You collect/charge 20% VAT on the shipping costs which is also paid by the customer (if you charge for shipping)
• You pay 20% VAT when you order the print from your print on demand service.
• If you are VAT registered you can deduct the VAT you paid to the print on demand service (supplier) from the VAT you collect from the customer.

You normally report VAT by sending a quarterly VAT tax return to HMRC online. Or you can use the VAT Annual Accounting Scheme which allows you to send just one VAT return per year.

Selling imported printed goods in the UK 

Imported printed goods outside the UK at the point of sale that are sold directly to customers in the UK valued between £39 to £135 are subject to import VAT (usually at the standard rate), which is charged by the seller/shipping company. Or you will pay yourself to HMRC if you are registered. They are exempt from customs duty though. 

So if you are based in the UK and your fulfilment service is based abroad they and/or the shipping company will charge you VAT on your orders, and you will then charge VAT to your UK based customer at the point of sale and shipping of the item.

Imported printed goods valued over £135 are subject to VAT and customs duty. You can use this trade tariff service to check the duty on your particular products. Goods imported from the EU are exempt from customs duty.

If you are VAT registered, you can claim back any VAT you paid on goods you've imported as input tax. You’ll need your Import VAT Certificate C79 and the import VAT statement. VAT-registered businesses can account for import VAT on their VAT Return by using postponed VAT accounting which enables you to claim input tax on the same tax return.

Either way you will still need to charge VAT to your customer, as well as for the shipping additionally.

Imported goods that are for B2B sales are not liable for VAT provided the business has given you their VAT registration number. Read more about import rules here.

Selling to the EU from the UK (exports)

If your business is based in the UK you don’t need to collect/charge VAT for exporting goods to the EU if you are VAT registered. You can ‘zero rate’ the sale if the goods are exported within 3 months.

You’ll still be charged 20% VAT on your orders by the UK based print on demand service you use for fulfilment though.

If you use an EU based print demand service, in the same country as the customer for example, you may be charged local VAT on your orders.

Useful resources for exporting goods: 

• You can check the rules for exporting here. 
• For more information on exports to the EU read HMRC’s dedicated page.
• For details of EU customs charges and regulations see this page from the Post Office.
• To learn about EU VAT  visit the One Stop Shop or check the thresholds and VAT rates of each individual country.  

Selling outside the EU: Customs Duty, GST and import taxes 

If you sell printed goods to the US you may be liable to charge customs duty on goods worth over $800. Tariffs vary but  ecommerce purchases over $2500 have a flat-rate tariff of 3%.

If you sell printed goods to Australia you may be liable to pay GST (Goods and Services Tax). The standard rate is 10%.

For selling to other countries outside the UK and EU you should check the tax rules imposed by the local authority. 

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A snapshot of print on demand taxes 

This guide goes some way to simplifying taxes for print on demand businesses in the UK. But it’s an initial overview mainly for UK based sellers.

As we have mentioned, the tax regulations for international selling regarding VAT and import or customs duties can get very complicated.

As there are a number of country specific thresholds, rates and registration requirements for each individual tax jurisdiction. And if you sell at high volumes to the EU or other countries there’s a lot more to consider regarding tax compliance.

Even more so if you use fulfilment services based in EU or non-EU foreign countries.  So we strongly recommend exploring the resources in the last bullet point in the ‘Selling to the EU from the UK section’.

Lastly, if taxes for print on demand sound completely overwhelming, don’t panic! They’re certainly not easy for a beginner to get their head around. 

By using Crunch’s specialist ecommerce accounting service with award-winning software you can get all the help you need from our expert accounts. They’ll have printing money on top of art in no time.