New UK VAT rules starting from January 1


#1

Starting January 1, 2021, the way that UK VAT is collected on sales to customers in the UK will change under new legislation being introduced by the UK Government.

Amazon will be responsible for collecting UK VAT on the following sales of goods delivered to customers in the UK where ordered through any Amazon storefront:


  1. Goods delivered from inventory stored outside the UK with a parcel value of up to £135; and
  2. Goods delivered from inventory stored in the UK, irrespective of value, where you, the seller, are not established in the UK

Where either of these supplies take place, Amazon will calculate and collect UK VAT from the customer at checkout and remit this directly to the UK Tax Authorities. You will not receive the UK VAT amount in your disbursements and will not be required to remit these amounts to the UK Tax Authorities.

Please note that the current VAT exemption for sales of goods under £15, where goods are delivered to UK customers from inventory stored outside of the UK, will also be removed from January 1, 2021. At that point, UK VAT will be calculated and collected by Amazon on these sales irrespective of their value.

Further information regarding this change and the implications for your business, is available on the UK VAT Ecommerce Legislation help page.


#2

What happens for UK based seller, seller fulfilled orders, sending items to France? Will Amazon also deduct the VAT, add the VAT, make the buyer pay import duties or the seller etc etc etc…


#3

Amazon won’t be dealing with import export duties, listings won’t show on dot Com the way they do now the buyer will have to physically select UK and they will be notified of duties to be paid prior to delivery.
As for vat there is no change in the EU as far as I am aware.

Personally I expect EU sales to dramatically plumit unless using fba in EU.


#4

UK Based seller still need to account the VAT to the UK Indirect tax collection department which is subject to £85k VAT turnover threshold.


#5

Is Amazon sending to Overseas addresses from amazon.uk for FBA or Seller fulfilled from 1st Jan??
I didn’t think it was.


#6

Yes, but Amazon have said that if we sell on the DE/FR/It etc marketplaces, from Jan 1st we need to include duties etc in the prices of the product. That is currently not possible as a buyer could buy a cheap item and incur no duties, or they could buy 10 of those cheap items, which would likely attract import duties.

For some weird reason Amazon are saying the seller must pay the duties not the buyer.


#7

If you are based in the UK and shipping from the UK and below the distance selling limit of an EU country, then there is nothing else you need to do.

VAT on items you send to the EU will no longer be applicable. You can choose to remove the VAT element from both the item and postage if you want or leave prices as they are - but there will be no VAT on these items to hand over to the UK government.

It will be the couriers job to get any VAT or import duties from the customer before delivery is made (so be prepared for customers complaining of delays in receipt when the courier is actually holding onto the item waiting for the customer to pay VAT and duties).

Eventually, I think in the summer, new EU laws are due that will force Amazon to collect the VAT and forward to the appropriate country government and then this will relieve the courier of having to collect these taxes. Again, the new tax will be applied automatically but will not form part of your overall turnover. eBay have been doing something similar on US and Australian sales for some months now.


#8

If you’re selling on FR, or DE etc and based in the UK then Amazon expects you to cover all VAT and Tariff costs (delivery duty paid). They do not want the customer to pay anymore than the purchase price seen on Amazon.


#9

Amazon FBA Export will be available as far as I am aware meaning customers can export but its on the same terms say we buy an item from amazon in the USA we pay the duties.

But I think things may change again once a deal or no deal is eventually done its not great for business at the moment


#10

Yes - my post was referring to selling on Amazon UK and getting orders from the EU. I should have made that clear.

I have already shut down all the Amazon EU sites and waiting to see what happens with Brexit etc. and if there will be any tools Amazon will release so that if using BIL prices on the EU sites will be updated accordingly. I’m hoping I can build in some offset amount as couriers charge per item to send items duty/tax pre-paid. I do not even know if Royal Mail who I use currently will be able to do this. So there are many changes to be made in the next few weeks.

I will re-open Amazon UK in the new year but I doubt I will re-open Amazon EU for some time.


#11

Royal mail currently have nothing in place for delivery duty paid. The only courier we use that is not charging a fortune for delivery duty paid and seems to have it’s act together is DPD


#12

I will have to take a look at DPD in the new year.

However, it all depends on how Amazon will implement the BIL tool. It will now need to

  1. Remove UK VAT (if applicable on the item)
  2. Add in an offset (charge made by courier for sending an item pre-paid of duties/taxes)
  3. Add destination country VAT (varies by country)
  4. Add in any duties

Somehow I dont think it will do all this. It will probably change so it keeps stock in synch only and not prices and we will be expected to do this manually per country ourselves. If that is so I doubt I will re-open Amazon EU until the new laws come into effect forcing Amazon to apply and collect the VAT.


#13

Yep, I spoke to our RM account manager and she said nothing in place “yet”, indicating there may be in the future. But until we know what deal if any, we have no clue regards duties etc.


#14

Amazon will not be collecting any taxes or charges for UK - EU or EU - UK orders, as they say the price on the screen will be the DDP price - delivered duties paid

The courier is the broker in this regard, all of them are set up to charge you the extra fees in the shipping cost, they will then distribute to the various countries

This is how its been setup for deal or no deal, amazon will not play a part of it


#15

So if we import from outside the UK, then do we need to file those “import documentations” with amazon, or should we need to file those directly with the HMRC and get VAT refund ?


#16

Yes, however as we cannot tell prior to the sale, what the duties are likelyt to be, how do Amazon expect us to charge the buyer?

It’s impossible.


#17

Any news yet on whether Amazon will register in UK for vat from January so that we pay vat on our fees or will the reverse charge remain in place?


#18

I would imagine the VAT on fees is charged and then Amazon will forward to the tax authorities. The reverse charge ends on 1st Jan


#19

Royal Mail still have no system in place to do this.

Also, that is the case now.
Come July (I think) new EU laws will be in place forcing Amazon to do the taxes collection and not the courier. It should have been Jan but the laws got delayed because of Covid.


#20

If Amazon stay invoicing from the EU then there will be no VAT so you enter as Zero VAT on your accounts instead of Reverse Charge
If Amazon invoice from the UK then you will have VAT added (affecting cashflow as this will have to be claimed on your VAT return)