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:
- Goods delivered from inventory stored outside the UK with a parcel value of up to £135; and
- 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.