Short answer: Most US brands selling to UK shoppers do not need a UK VAT registration. For consignments valued at GBP 135 or less, UK VAT is charged at checkout and reported by the seller, and the parcel clears the border with no import VAT due. You need your own registration once you hold UK stock, sell higher-value consignments, or make UK domestic supplies.
What the GBP 135 rule actually does
Consignments of goods valued at GBP 135 or less, excluding shipping and insurance, are treated as supplies made in the UK for VAT purposes. The seller charges UK VAT at checkout at the rate that applies to the goods and reports it on a UK VAT return. The parcel then clears the border without an import VAT charge, because the tax was already accounted for. This is the part that catches US sellers off guard: the tax moves from the border to your checkout, which means your store has to calculate it correctly on every order.
When a US brand does need UK VAT registration
Registration becomes necessary when your model breaks the low-value pattern. The common triggers are holding inventory in a UK warehouse or with a UK 3PL, selling consignments over GBP 135 where import VAT is collected at the border and you want to recover it, or making UK domestic supplies such as fulfilling from UK stock to UK customers. If none of those apply, registering anyway buys you quarterly returns and an agent's fees for no benefit.
How this shows up in a Shopify checkout
For a DDP-style UK checkout, the practical setup is straightforward: identify consignments at or under GBP 135, apply the correct UK VAT rate at checkout, and show a VAT-inclusive total so the shopper sees no surprise charge on delivery. Orders above the threshold typically flip to a duties-and-taxes-unpaid experience where the carrier collects import VAT on delivery. That is a worse customer experience, but it is the correct treatment unless you are registered and importing the goods yourself.
The mistake that costs sellers the most
The expensive mistake is doing nothing: not charging VAT on low-value consignments and letting parcels arrive with unexpected charges. UK shoppers refuse those parcels at high rates, and the return leg eats the margin twice. The second most expensive mistake is over-registering out of caution. Map your actual flows against the threshold first, then decide.