Amazon VAT collection for UK


#1

Hi all,

We got an e-mail from Amazon that will be collection the 15% VAT automatically on UK orders.
But it did not say what will happen if a customer from UK orders a product on, say, DE marketplace.

Basically, question is – will Amazon collect VAT only on Amazon UK or will it collect VAT on all orders sent to UK customers?

Thanks,
Rudolf


#2

Good question. I also want to know how it applies to sellers located outside of the UK. Does this mean, I would need to increase my selling price by 15%? Or would Amazon UK automatically collect it and send the VAT to authorities on my behalf?


#3

Amazon assumes price is VAT-inclusive.
In the past you would have to deal with authorities yourself, now Amazon will do it for you.
So, they will take 15% off your price.

The main problem with that is that 15GPB limit is no longer applicable (at least on Amazon platform) – everything is subject to VAT. I guess, price increase is in order. This is why I ask about other marketplaces. If customers in UK are suddenly hit with price increase, they may turn to other nearby marketplaces.

Rudolf


#4

I think you will find this is UK law not Amazon

This is a small part of the info given to sellers from Amazon

Starting 1 January 2021, as part of Brexit, a new set of VAT rules will apply in the UK. Please read this email as it contains potentially important information for your business.

If you are delivering goods to UK customers from outside of the UK:
o The current VAT exemption for sales of goods under £15 will be removed. All of your sales of goods will now be subject to VAT.
o If the shipment value of these goods does not exceed £135, Amazon will be required to collect and remit the applicable VAT.
o If the shipment value exceeds £135, you will still have to remit VAT and any import duties yourself, as you are currently doing.


#5

Hi,

Yes, I got same e-mail, but was under impression that is Amazon itself. eBay here is doing same – charging GST on all purchase from outside the Australia, but Australia itself has a $1000 GST threshold. I think it comes down to the fact that government deals with Amazon (eBay and others) as a company with huge turnover and not with us as individual sellers.


#7

It’s worth noting that the EU will be doing the same thing soon.

The new EU directive was supposed to begin Jan. 1 but was delayed 6 months due to corona , so roughly Summer 2021. Amazon, Ebay, and similar sites will all become responsible for handling VAT themselves within the entire EU. The EU will also be removing their low value shimpments rule too, so no matter how low the sale price is, it will still be subject to VAT, just like the UK.

Just something to keep in mind along with post brexit changes. It’s a shame this didn’t happen in January as it would have been easier to transition along with brexit, but now there’s a 6 month gap between the two policies.


#8

Thank for the info.

I do have a question, though. How will customs know VAT is already paid on the parcel? Do they contact customer and customer provides an invoice or should I include some sort of special invoice generated by Amazon? I guess, this “special invoice” should contain Amazon VAT registration number on it.

Thanks,


#9

I have seen on Etsy, at the checkout you have info that the price includes all taxes and vat included so I presume they should make the same unless it will affect the sales. If customer will get price increase at the time of paying it could be very disappointing.


#10

This is fine. Amazon insists on all prices to be VAT-inclusive.


#11

So am I right in thinking if you are based in the uk and sell to the uk, or use FBA to sell to the uk, you just declare your vat as usual, and amazon wont deduct it automatically?


#12

Just to be clear its not 15% its 20%


#13

Yes if your VAT registered only applies to non uk based sellers.


#14

Thanks for that Russ


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