VAT Changes on Sales to UK Customers


#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.


Listing profit calculation
#2

We are a EU based seller with inventory stored only in FBA-DE. So after Jan 1, will orders to UK customers continue to be fulfilled from FBA-DE inventory and we dont have to register for UK VAT? (Of course, as long as package value limits are respected).

If so, that is good news for small businesses like us who did not want to have the headache of additional VAT registration in UK.


#3

My understanding is that FBA will no longer fulfill across the UK border due to the Brexit headache. So, to sell in the UK you’ll need inventory in a UK fulfillment center. A DE FC will be able to fulfill to all EU marketplaces (not UK).


#4

Thank you! So, this regulation shifts the VAT collection/remission burden to Amazon but still the sellers need to take care of Customs on each order (if they are shipped from outside UK)? And hence no cross-border FBA?
In that case, if we ship to UK FBA (after clearing customs through an agent) then we do not need to register for VAT in UK since we are based outside UK? And Amazon will handle VAT collection on orders of UK customers?
In this case, how do we claim back VAT on import into UK?

May be in our case (real tiny business), it may be best to wait out the first couple of month to see what strategy could best work for us. Our sales in UK are not too high so at this stage it is not worth for us to register and maintain VAT for UK.


#5

These will be also collected from UK Sellers that are not yet registred on UK VAT?


#6

Your last question is one that I was wondering. Will we not be charged VAT on importation if shipping to an Amazon FC? Otherwise, we’ll still have to file returns to reclaim it. Also, I think you need to be VAT registered in order to even clear customs, but I’m not an expert, so could be wrong.


#7

All non UK residents are required to be Uk vat registered to store stock in UK


#8

I am wondering how UK flat fee VAT registered, EU based companies (outside of the UK), will be treated in this setup. If the flat fee model is not incorporated, Amazon will be charging higher VAT than the seller are obliged to pay to the UK government.


#9

Correct. But perhaps speak to HMRC/ Accountant, maybe you can claim the VAT back?


#10

At last no more VAT evaders, i envisage prices increasing across the board on amazon.

Good news for the UK, more money staying in this country.


#11

About time I’ve been saying this should have happened years ago, finally, distance sellers can no longer avoid/fiddle their VAT to gain an advantage


#12

Everybody wins. I’ve been sticking with zero rated stuff, just for simplicity. In the US many states have done this with sales tax. States and countries get their due and sellers aren’t burdened with difficult and confusing compliance. And, yes, level the playing field.


#13

how does the international seller mark their package to say that amazon have collected the vat on the sale already?

and perhaps the same could work in reverse for a UK seller shipping to a customer in EU after 1/1/2021?


#14

Amazon doesn’t work with flat rate, this means that we will have to change to the Standard Rate almost necessarily, these are the words of my accountant. Unless you want Amazon to keep you 20% but this would be a disaster for cash flow


#15

Coming from a shipping background before this madness, I took a decision some years ago to never export. The time has come for an equal playing field for UK sellers selling to the UK. How can it be right that China and EU can be cheaper than something sent within the UK. The postal union schemes for no large letter charges when we are charged and state sponsored mail is also wrong. Sorry if you export a lot, but this little business will hopefully see some quality growth and profits, (probably not on Amazon, though, LOL!)


#16

I am happy about this, I cannot agree more - The test case is ebay.co.uk now, Chinese based sellers who by the way have now litterally plastered most pages on ebay.co.uk.) Chinese sellers will now need to raise their prices on Amazon.co.uk which creates a more level playing field for us all and is extremely good for the UK economy.

At last some good news!

#NOTMADEINCHINA


#17

Its a very simple change and will create a fairer system. I compete mostly with chinese sellers who will now suffer VAT at point of sale. Many of these previously sent, even high value items, as samples or gifts thus meaning no VAT was ever paid on the import giving them an unfair advantage. Losing 20/120ths of every sale to VAT will mean they need to increase prices.

The Online Market Place (OMP) now has to account for VAT at the actual selling price NOT some fake value dreamed up on the customs paperwork so the UK will benefit by millions of £s

Every OMP has to comply so ‘the other place’ will have to apply the same rules to its millions of similar chinese sellers.


#18

We are a Mobility company, our customers are VAT exempt for mobility products. How is this going to work for us? If Amazon are going to take 20% off our sales automatically, and we still have to give the customer 20% back.

Hopefully there’s someone from Amazon I can speak with, as this is unique situation.


#19

Great news…! Will level the playing field, especially with those sellers who are not in the UK and ship from outside of the EU, so have a VAT advantage (with LVCR).

The thing is… What is to stop a seller from registering a UK address, but then shipping the goods from outside the UK, and not telling Amazon that this is the case. Amazon wont deduct the VAT automatically.


#20

Hopefully their account would fail verification.