Taking payments as a UK solo founder: Stripe, Lemon Squeezy or Polar
The VAT question decides this, and guides written for a US audience skip it. What changes when you are a UK sole trader selling software abroad.
Most advice on this is written for someone in Delaware. It tells you Stripe has the lowest fees, which is true, and then stops. For a UK sole trader selling digital products to people in other countries, fees are the small part of the decision.
The big part is who is legally selling the thing.
The bit that catches people out
Sell a digital product to a consumer in France and French VAT applies. Same for Germany, Spain, and the other 24. It applies from the very first sale. There's no threshold to hide under, which surprises people who assume the UK's £90,000 registration threshold covers them.
So you either register for VAT in the EU through the non-Union One Stop Shop scheme and file quarterly returns, or you find someone to do it for you.
That someone is called a merchant of record.
What a merchant of record actually does
With Stripe, you're the seller. Stripe moves the money. The VAT, the invoices, the tax returns and the audit risk are all yours.
With Lemon Squeezy or Polar, they're the seller. The customer buys from them, they collect and remit the VAT in every jurisdiction, and they pay you the balance. Your accounting becomes one line: money in from one company.
That's the whole trade. You pay more per transaction and you stop thinking about tax.
The numbers
| Stripe | Lemon Squeezy | Polar | |
|---|---|---|---|
| Fee (UK/EU cards) | ~1.5% + 20p | 5% + 50c | 4% + 40c |
| Merchant of record | No | Yes | Yes |
| You handle EU VAT | Yes | No | No |
| Payout | 2-7 days | Every 2 weeks | Every 2 weeks |
At £500 a month in sales, the gap between Stripe and Lemon Squeezy is roughly £20. An accountant who handles OSS registration and quarterly filings will cost you more than £20 a month, and you'll still be the one collecting the paperwork.
At £20,000 a month, the gap is about £800 and the maths flips hard.
What I'd actually do
Under a few thousand a month: merchant of record. Your time is the scarce thing and quarterly VAT filing in a scheme you've never used before will eat a weekend the first time. Lemon Squeezy if you want the mature option, Polar if you're selling to developers and want usage billing or licence keys without building them.
Selling only to UK customers: Stripe. No OSS, no cross-border VAT, and you're under the threshold until you're doing £90,000 a year. The merchant of record premium buys you nothing here.
Above roughly £10,000 a month: move to Stripe and get an accountant. The fee difference now pays for professional help several times over. Plan the migration before you need it, because moving live subscriptions between processors is genuinely unpleasant.
The thing nobody mentions
Both merchant-of-record platforms will hold your first payout longer than you expect while they run fraud checks. Two to three weeks is normal for a new account.
If you're counting on that money to pay for the hosting, you'll have a bad fortnight. Budget for it.
One more consideration
Stripe is the safest bet on longevity. Lemon Squeezy was acquired in 2024 and Polar is young. Neither is a reason to avoid them, but if you build your entire billing flow around a platform's specific features, know that you're accepting some risk in exchange for the tax convenience.
Keep your subscription records exportable. That's true whichever way you go.