TITLE: Amazon FBA UK Fee Changes: How to Update Your Books and Q4 Margins
Amazon’s latest UK FBA changes affect your fulfilment costs, returns and stock records. Here’s how to reflect them in your books and refresh your Q4 margins.
Update fulfilment costs from 2 November
From 2 November 2026, Amazon’s UK FBA fuel and logistics-related surcharge rises from 1.5% to 2%. It applies to fulfilment fees, not your product’s selling price. Amazon says the average increase is around £0.02 per unit, but the actual amount varies by product size and dimensions. For UK Multi-Channel Fulfilment (MCF), the 2% rate starts on 19 November.
Check Amazon’s surcharge announcement and update your bookkeeping and product margin models using your actual fee data. Keep the surcharge identifiable within fulfilment costs instead of applying 2% to sales.
Festive peak fulfilment fees have also been running since 15 October 2026 and continue through 14 January 2027. They apply to selected small and standard parcels, plus large and extra-large envelopes, under the UK rules. Amazon’s published averages are £0.12 per parcel item and £0.07 per large or extra-large envelope item. The surcharge applies on top of peak fulfilment fees from 2 November.
Review Amazon’s peak season announcement and check the 2026 festive peak fee details. Not every product or fulfilment route is covered, so use the applicable rate and eligibility information for each SKU.
Recalculate your Q4 margin before changing prices
A small per-unit charge can make a significant difference across thousands of orders. Recalculate contribution margin by SKU and fulfilment method before your next Q4 price or promotion decision.
Include:
- Amazon’s base fulfilment fee
- Any festive peak fee that applies
- The 2% surcharge from 2 November, or from 19 November for UK MCF
- Referral fees, storage and other relevant fulfilment costs
- Refunds, returns and expected stock losses
Use Amazon’s Fee and Economics Preview reports, Profit Analytics and Revenue Calculator to check fee estimates against charges actually posted to your account. Then compare the revised cost per unit with your current selling price and promotion assumptions. This gives you a clearer view of which products still meet your margin targets during peak season.
Book reimbursements as stock recovery, not sales
When Amazon reimburses you for FBA inventory lost or damaged in its fulfilment network, the payment usually relates to stock you have already written off or need to write off. It is generally more informative to record it as a recovery of the inventory loss, such as a credit to cost of goods sold (COGS) or a separate inventory-recovery account, not as sales revenue.
For example, if you wrote off a unit’s cost when Amazon recorded it as lost, and Amazon later reimburses that loss, record the reimbursement against the relevant stock-loss or COGS account. The precise entry depends on when you recognised the write-off and how your books track Amazon settlements and receivables. Avoid crediting revenue: that would inflate sales and make product performance harder to read.
A reimbursement can still affect your company’s taxable trading profit. HMRC generally treats compensation connected with trading operations as a trading receipt. In accounting, you may present the amount as recovery of a cost rather than sales; for tax, it should still be included appropriately in your trading-profit calculation. See HMRC guidance on compensation and trading receipts.
Apply VAT treatment to the substance of the payment
A genuine payment compensating you for lost or damaged goods is typically outside the scope of VAT because you are not supplying goods or services to Amazon in return for that payment. HMRC’s guidance explains that a payment to compensate for loss or damage is not consideration for a supply where there is no direct link to something supplied in return. See HMRC’s guidance on lost, stolen, damaged or destroyed goods and its VAT guidance on compensation payments.
That does not mean every payment labelled “reimbursement” automatically has the same VAT treatment. Check what the payment relates to, your contractual position and Amazon’s supporting records. Keep it distinct from VAT on Amazon’s fees. If Amazon charges VAT on fees, record the VAT based on the relevant invoice and reclaim it only where your business is entitled to do so and holds the necessary evidence. HMRC explains the general rules in its VAT guide.
Reconcile the FBA Inventory Ledger, not just the payout
A settlement statement shows how money moves through Amazon’s account. It does not, by itself, explain what happened to every unit of stock. Reconcile your inventory and reimbursement activity to the FBA Inventory Ledger, including the reason codes and related records.
For each adjustment, match the SKU and quantity to the relevant ledger movement, then check whether a reimbursement was issued, is still due, or was declined. Keep evidence of follow-up claims and subsequent Amazon decisions. This process helps you identify missing reimbursements and avoid recording a loss twice, or recognising a recovery that has no supporting inventory event.
Keep fees and reimbursements in separate accounts or categories. Netting them into one Amazon balance can hide rising fulfilment costs, unresolved stock claims and differences between the ledger and the settlement. Amazon’s FBA lost and damaged inventory reimbursement policy is a useful reference when reviewing reimbursement outcomes.
Record returnless resolutions as a refund and a stock loss
Amazon’s UK FBA Returnless Resolutions lets participating sellers set a maximum item price between £1 and £75. Amazon assesses each return individually. If a return qualifies, the customer receives a refund and keeps the item.
Amazon states that these units do not qualify for inventory reimbursement. The product does not return to your FBA inventory, so there is no unit to add back as sellable stock and no reimbursement to recognise. Account for the customer refund using the relevant Amazon transaction data, and record the unit’s cost as a return-related stock loss or write-off in line with your accounting policy.
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