This is the question we answer more than any other, and it is the one that quietly causes the most trouble. If you sell to UK customers on DDP terms and think of it as “exporting from Germany”, the UK VAT will go wrong. Once you see it the right way, it is simple.
In short: selling on DDP (Delivered Duty Paid) means you deliver the goods to your UK customer with all UK import formalities, duty and import VAT handled by you. In UK VAT terms that is two transactions, not one: an import of your goods into the UK, and then a domestic sale in the UK on which you must charge UK VAT (usually 20%). It is not just one zero-rated export, and treating it as one is the single most common mistake we unpick.
DDP is one of the international trade terms (Incoterms®) that set out who does what in a sale of goods. Under DDP, the seller takes responsibility for getting the goods all the way to the buyer, including clearing them through UK customs and paying any duty and import VAT. Your UK customer just receives the goods.
Large UK customers (across retail, manufacturing and many other sectors) often insist on DDP, because it is the easiest arrangement for them. Some overseas sellers also choose it deliberately, to give a smoother experience and stand out from competitors who deliver on other terms, such as DAP.
Here is the mental model that makes everything else fall into place. When you sell DDP, do not picture one export. Picture two steps:
The import, and then the sale in the UK. That is the whole thing.
If you treat the sale as an export, you zero-rate your invoices and charge no UK VAT. But a DDP sale to a UK customer is a UK sale, so UK VAT is due. Getting this wrong leads to underdeclared VAT, and often to import VAT that is never recovered: a double cost. It is exactly the situation we are brought in to fix (see correcting past errors).
On all other Incoterms®, such as DAP (Delivered At Place), the customer is the importer and deals with UK import VAT and duty: a different VAT position. Many businesses test the UK on DAP first and move to DDP as they commit. If you are not sure which you are selling on, that is worth checking, because it changes who registers and who charges what.
There is one more thing to line up: your Incoterms® and your contractual terms. Your Incoterms® decide whether you have to charge UK VAT; your contractual terms decide whether you can reclaim the import VAT (see import VAT and PVA).
Author: Amanda Bowles (VAT).
Reading time: about 3 minutes.
Sources (verified 12 Aug 2026): DDP is defined in the ICC Incoterms® 2020 rules; UK VAT treatment of imports and domestic supplies: Paying VAT on imports to Great Britain; standard rate 20%: VAT rates.
Yes. The UK leg is a domestic sale, so UK VAT (usually 20%) applies. It is not a zero-rated export.
Almost always, yes, because it makes you the UK importer and seller. See UK VAT registration.
On DDP you (the seller) are the importer and charge UK VAT; on DAP the customer imports. The VAT position is different.
If you sell, or are about to sell, DDP into the UK, contact our VAT team and we will make sure it is set up right from the first shipment.
Senior Manager
VAT
Director
Head of Indirect Tax & HR
