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How to Calculate VAT for Amazon Sellers UK

Jan 19, 2021 | E-Commerce

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 how to calculate VAT for Amazon Sellers in UK.

How to Calculate VAT
How to Calculate VAT for Amazon Sellers UK 4

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 permission 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.

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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 the local government requirements.

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 to Calculate VAT: How Sterlinx can help you

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 through Sterlinx Global today. We are happy to advise you further and see your business blossom!

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