How to Calculate VAT for Amazon Sellers UK

Posted by: Jay Redman
Category: Amazon
How to calculate VAT for Amazon Sellers Accountants for Amazon Sellers | E-Commerce Accountants UK

So whether you are currently a VAT registered business selling on Amazon FBA or whether you will be hitting the threshold soon, this blog will help you to understand more about calculating Amazon FBA VAT.

Common Mishaps With Calculating VAT

A common problem that Amazon sellers often face is that when they are listing their products, Amazon will only allow them to show their final sales price to the customer. With the introduction of Amazon Business this has changed very slightly.

To explain this in more detail, if you list your product on Amazon for £20, you will not have the permissions to charge £20+VAT. The only price you will be able to see will be the amount you would like to charge the customer.

As we already know that the current VAT rate in the UK stands at 20%, although this can become slightly complicated if you are selling on Amazon PAN EU as the rates of VAT and the threshold varies in the different countries within Europe.

Within the Amazon guidance for charging VAT, they state that they must charge VAT on all orders delivered to destinations in member countries of the EU. This also means that the VAT will be charged accordingly to what the local government requirements are.

DISCLAIMER: Please note that there has currently been a temporary reduction in the VAT rates in certain EU countries, so be sure to check this when calculating your VAT. For example the  VAT rate In Germany currently stands at a reduced rate of 16% until the 31st December 2020. As of January 2021, it will return to 19%.

How Sterlinx can help you Calculate your VAT

If you would like any more advice on how calculated VAT works for your specific business model or if you are new to the eCommerce world and would like more information for start up businesses, contact our team of specialists today. We are happy to advise you further and see your business blossom!

Author: Jay Redman