VAT for Amazon FBA and marketplace sellers in 2026
If you sell on Amazon, eBay or any online marketplace, VAT does not work the way it does for a normal shop. The marketplace often collects the VAT for you, overseas sellers have to register from their very first sale, and where your stock physically sits can change the whole answer. Add the £135 import rule, the VAT now charged on your Amazon fees, and selling into the EU, and it gets confusing fast. This guide sets out the 2026 rules in plain English, with a free tool to find the one that applies to you.
UK seller registers at
£90,000
Overseas seller registers at
£0
Marketplace collects VAT up to
£135
EU parcels use IOSS up to
€150
First, who actually owes the VAT?
For most of VAT history the seller charged the VAT and paid it to the tax office. Marketplaces changed that. Since the start of 2021, HMRC treats the online marketplace itself as the seller for VAT on a lot of transactions, which means Amazon or eBay charges the VAT to the shopper and hands it to HMRC, not you. This is called the deemed supplier rule.
The marketplace becomes the deemed supplier when it sets the terms of the sale, takes or authorises the payment, and is involved in ordering or delivering the goods, which describes almost every marketplace sale. Whether it applies to your sale depends on two things above all else: where your business is based, and where your goods are sitting at the moment they are sold. The tool below walks you through it.
Free tool
Which UK VAT rule applies to your sale?
Answer a few questions about a single sale and see who accounts for the VAT and whether you need to register. It follows the HMRC marketplace and overseas goods rules for 2026.
1. Where is your business established?
2. Where are the goods at the moment they are sold?
3. How are you selling?
4. Is the consignment worth £135 or less?
5. Is the buyer a UK VAT registered business that gives you its VAT number?
Answer the questions above to see who accounts for the VAT.
This tool gives general guidance for common cases, not tax advice. Check your own position with HMRC or an accountant.
When you have to register for VAT
The registration rules split sharply depending on where your business is based, and this is the single biggest thing marketplace sellers get wrong.
A business established in the UK only has to register once its taxable turnover goes above the £90,000 threshold in any rolling 12 month period, or when it expects to cross it in the next 30 days. Below that you can register voluntarily, but you do not have to.
An overseas seller is treated completely differently. If you have no business establishment in the UK, there is no threshold at all. The moment your first unit of stock lands in a UK warehouse, or your first parcel ships to a UK customer, HMRC expects you to already hold a UK VAT number. HMRC calls this an NETP, a non established taxable person, and the registration point is your very first taxable sale.
| Your situation | VAT registration point | Good to know |
|---|---|---|
| UK established business | Taxable turnover above £90,000 in any rolling 12 months, or expected within 30 days | You can register voluntarily below the threshold to reclaim VAT on stock and fees |
| Overseas seller with stock or sales in the UK | From your first sale. There is no threshold | You still register even when the marketplace collects the VAT for you |
| Overseas seller selling only to UK VAT registered businesses | You may not have to register at all | The business customer accounts for the VAT under the reverse charge instead |
Not sure whether you have crossed the threshold, or whether voluntary registration is worth it? Our guide on how and when to register for VAT walks through both, and VAT for sole traders and freelancers covers the smaller seller side.
How marketplaces became the VAT collector
When the deemed supplier rule applies, the marketplace charges and pays the VAT, but the exact treatment still depends on where the goods are. Here is who accounts for the VAT to HMRC in the situations marketplace sellers meet most often.
| The sale | Who accounts for the VAT | What it means for you |
|---|---|---|
| Overseas seller, goods already in the UK, sold through a marketplace | The marketplace, at the point of sale | Your sale to the marketplace is a zero rated deemed supply, but you must still be VAT registered and file returns |
| Overseas seller, goods outside the UK, consignment £135 or less, through a marketplace | The marketplace, at the point of sale | The marketplace charges the shopper the VAT at checkout |
| Any seller, goods outside the UK, consignment over £135 | Import VAT is due at the border | Normal import and customs rules apply, then you sell on as UK stock |
| UK established seller, goods in the UK | You do, on your own VAT return | The deemed supplier rule does not apply to you. You are the seller |
The point that trips people up is the second row of the table above. Even when your stock is in the UK and Amazon collects every penny of VAT on your behalf, you are still a taxable person in HMRC’s eyes. You have to hold a valid VAT number, keep your records for six years and file returns, and your onward supply to the marketplace is zero rated rather than exempt, which is what lets you reclaim import VAT.
The £135 rule for goods coming from abroad
If your goods are outside the UK at the point of sale, a single figure decides how the VAT works: £135. This is the total value of the consignment, worked out as the price the goods were sold for, without transport, insurance or any separate taxes. It is the value of the whole consignment, not each item, so a parcel of several low value items is added together.
At £135 or less, VAT is charged at the point of sale rather than at the border. If you sell through a marketplace, the marketplace charges it. If you sell direct from your own website, you must register for UK VAT and charge it yourself. The one exception is a sale to a UK VAT registered business that gives you its VAT number, where the reverse charge applies and the customer accounts for the VAT instead. You can confirm a customer number with our UK VAT number checker.
Above £135, the point of sale rules stop and normal import VAT and customs duty apply when the goods enter the UK. To see the full landed cost before you ship, including duty and import VAT, use our import VAT and customs duty calculator.
Where your FBA stock sits changes everything
Fulfilment by Amazon means Amazon stores your stock and ships it. For VAT, the key fact is simple: goods stored in a UK fulfilment centre are goods located in the UK, so selling them is a UK sale. That is why an overseas seller who sends a single pallet into a UK Amazon warehouse triggers the registration duty straight away.
To import that stock in the first place you need your own GB EORI number, the reference customs uses to identify you. Register it in your own business name. Using a freight forwarder’s EORI is a common and costly mistake, because it can block you from reclaiming the import VAT later.
On the import itself, VAT is due when the goods arrive. If you are VAT registered you do not have to pay it in cash at the border. Postponed VAT Accounting lets you declare the import VAT and reclaim it on the same return, so it never leaves your bank account, subject to the normal input tax rules. We explain the mechanics in the guide to Postponed VAT Accounting.
Once you are registered, the arithmetic on every sale and every import still has to be right. Our free VAT calculator handles the add VAT and remove VAT maths in seconds so your figures reconcile.
VAT on your Amazon fees since August 2024
This one caught a lot of UK sellers by surprise. Until the middle of 2024, Amazon billed most seller fees from its Luxembourg company, Amazon Services Europe S.à r.l., and those fees generally fell under the reverse charge, so no VAT was added to the invoice. From 1 August 2024 those services moved to Amazon EU S.à r.l., which has a UK branch. Because the fees now come from a UK establishment, Amazon adds 20 percent UK VAT to selling fees, FBA fees and the rest.
What that means for you depends on whether you are registered. If you are VAT registered, the VAT on your fees is input tax you reclaim on your return, so it is a cash flow point rather than a real cost. If you are a small UK seller trading below £90,000 and not registered, you cannot reclaim it, so it is a straight 20 percent increase on your Amazon costs. For some sellers that tips the balance in favour of registering voluntarily.
Selling to customers in the EU
Since Brexit, selling from the UK into the EU is treated as exporting into a third country, and one assumption catches sellers out. The EU has a €10,000 threshold for cross border sales, but it only applies to businesses established inside the EU selling between member states. As a UK seller you do not get it, so EU VAT applies from your first sale.
Two schemes keep this manageable. For parcels sent to EU shoppers with a consignment value of €150 or less, the Import One Stop Shop, or IOSS, lets you charge the destination country VAT at checkout and file a single monthly return, which also speeds the parcel through customs. Above €150, there is no IOSS, so standard import VAT and customs apply in the destination country, either paid by you as delivered duty paid or by the customer on delivery.
If you hold stock inside the EU, for example through Amazon’s programme for storing goods across several countries, the picture changes again. You must be VAT registered in each country where your stock is held, and you can then use the Union One Stop Shop to report sales to shoppers in other EU countries through one return, while sales inside a storage country go on that country’s local return.
| Selling to the EU | How the VAT works |
|---|---|
| Parcel to an EU shopper, €150 or less | Use IOSS. Charge the destination country VAT at checkout and file one monthly return |
| Parcel to an EU shopper, over €150 | Standard import VAT and customs in the destination country |
| Stock stored inside the EU, selling across borders | Register where the stock sits, then use the Union One Stop Shop for sales to other EU countries |
Common mistakes marketplace sellers make
- Waiting for £90,000 as an overseas seller. There is no threshold for a business with no UK establishment. Registration is due from the first sale.
- Assuming the marketplace collecting VAT means you need no VAT number. When your stock is in the UK you still have to be registered, keep records and file returns.
- Using a freight forwarder’s EORI. Import in your own GB EORI, or you may not be able to reclaim the import VAT.
- Forgetting the VAT now on Amazon fees. Since August 2024 there is 20 percent UK VAT on the fees. Reclaim it if you are registered, budget for it if you are not.
- Expecting the EU €10,000 threshold. It is only for EU based businesses. UK sellers charge EU VAT from the first sale.
- Treating a marketplace sale like a normal receipt. Where a reverse charge or a deemed supply applies, your paperwork has to say so.
If invoicing is where you feel least sure, our guide on what a valid VAT invoice must include covers the reverse charge wording and the details HMRC expects. For filing, the returns themselves now go through Making Tax Digital.
What is changing next
The direction of travel is more of the tax sitting with platforms and more reporting done digitally. In the EU, the VAT in the Digital Age package widens the One Stop Shop from 1 July 2028 so that a single registration can cover far more cross border trade, including moving your own stock between countries, which should cut the number of separate registrations a seller needs. Mandatory electronic invoicing for business to business trade between EU countries follows from 1 July 2030. None of this removes the 2026 rules in this guide, but it is worth knowing which way the rules are heading before you build your setup.
Frequently asked questions
If your business is in the UK, only once your taxable turnover passes £90,000, though you can register voluntarily before then. If your business is overseas and you store or sell goods in the UK, you must register from your first sale, with no threshold.
Yes. A business with no UK establishment has no registration threshold. As soon as your stock is in the UK or your first parcel ships to a UK customer, HMRC expects you to hold a UK VAT number and file returns.
Because when your goods are in the UK you remain a taxable person, even though the marketplace accounts for the output VAT. You need the number to make your supply to the marketplace a zero rated deemed supply, to reclaim import VAT, and to meet your record keeping and filing duties.
For goods outside the UK at the point of sale, a consignment worth £135 or less has VAT charged at the point of sale rather than at the border. Through a marketplace, the marketplace charges it. Selling direct, you charge it yourself. Over £135, normal import VAT and customs apply instead. The £135 is the whole consignment value, without transport, insurance or other taxes.
If you are VAT registered, yes. Since 1 August 2024 Amazon adds 20 percent UK VAT to seller fees, and a registered business reclaims that as input tax on its return. If you are not registered you cannot reclaim it, so it becomes a real added cost.
Yes, if you import stock into the UK you need a GB EORI number in your own business name. Avoid importing on a freight forwarder’s EORI, as it can stop you reclaiming the import VAT.
The Import One Stop Shop lets you charge EU VAT at checkout on parcels to EU shoppers worth €150 or less and file one monthly return, rather than the customer paying VAT on delivery. It is optional, but it makes low value EU sales much smoother.
Only if your business is established in the UK. For a UK seller the £90,000 rolling threshold applies to marketplace sales like any other. For an overseas seller there is no threshold, so the £90,000 figure does not help you.
Figures and rules checked against gov.uk and HMRC guidance on online marketplaces and overseas goods, current for 2026. The Amazon fee change reflects the move to Amazon EU S.à r.l. from 1 August 2024. Always confirm your own position with HMRC or an accountant before you rely on it.