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VAT Registration for Amazon Sellers With a UK Company

Ryan Patrick

• 11 min read
VAT Registration for Amazon Sellers With a UK Company

Selling on Amazon through a UK limited company can make it easier to build a credible e-commerce business, but VAT can become complicated quickly once you start importing stock, using Amazon FBA, selling across Europe or holding inventory in different countries. One of the most common questions is straightforward: Does an Amazon seller with a UK company need to register for VAT?

The answer is not always. A UK company does not automatically have to register for VAT simply because it sells on Amazon. However, the company's taxable turnover, where goods are located, where they are sold, how stock is imported, and the countries in which inventory is held can all affect its VAT obligations.

As of 2026, the UK's standard VAT registration threshold is more than £90,000 of taxable turnover. But that threshold is only part of the picture for Amazon sellers. Certain overseas selling arrangements can create VAT obligations independently of the normal UK turnover threshold. This guide explains how VAT registration works for Amazon sellers with UK companies and what founders should consider before scaling their Amazon operation.

Does an Amazon Seller With a UK Company Need to Register for VAT?

Not automatically. If your UK company sells taxable goods and its taxable turnover exceeds £90,000 in the previous 12 months, it generally must register for UK VAT. Registration can also be required when you expect taxable turnover to exceed £90,000 in the next 30 days. Voluntary registration below the threshold is also possible. However, Amazon sellers need to look beyond turnover. For example, a UK company might:

  • Buy products from China
  • Import them into the UK
  • Store them in an Amazon FBA warehouse
  • Sell to UK consumers
  • Sell to customers in Germany, France and Italy
  • Use Amazon's European fulfilment network

Each part of that supply chain can create different VAT considerations. The key question is not simply “How much do I sell on Amazon?” It is: Where are my goods, who am I selling to, and where does the transaction take place for VAT purposes?

What Counts as Taxable Turnover?

For UK VAT registration, taxable turnover is broader than simply sales that have 20% VAT added. HMRC includes standard-rated, reduced-rated and zero-rated supplies when calculating taxable turnover. Exempt and out-of-scope supplies are treated differently. This matters because an Amazon seller may have products with different VAT treatments.

For example, a retailer selling a mixture of standard-rated household goods and zero-rated qualifying products needs to understand the VAT classification of each product rather than applying one rate to the entire catalogue.

Example

Suppose your Amazon business has:

  • £65,000 of standard-rated UK sales
  • £15,000 of zero-rated taxable sales
  • £10,000 of another taxable product category

The fact that some products are zero-rated does not automatically remove those sales from the taxable-turnover calculation. The VAT registration analysis needs to consider the nature of the supplies as a whole.

Amazon FBA and VAT: Why Inventory Location Matters

Amazon FBA, or Fulfilment by Amazon, changes the logistics of e-commerce because Amazon stores, picks, packs and dispatches your inventory. But the convenience of fulfilment does not eliminate VAT considerations. Suppose your UK company imports 10,000 products from China and sends them to an Amazon fulfilment centre in the UK.

The goods are now physically located in the UK. When those goods are sold to UK customers, UK VAT rules apply to the relevant taxable sales if your company is VAT registered. The situation becomes more significant if the seller is not genuinely established in the UK. HMRC states that an overseas seller owning goods located in the UK at the point of sale generally must register for VAT and account for VAT on direct sales to UK customers.

For a company incorporated in the UK, the precise VAT establishment question still needs to be distinguished from incorporation itself. HMRC notes that a UK company registration, registered office or virtual office does not by itself establish a business in the UK for these purposes. That distinction is particularly important for international founders using a UK company primarily as an e-commerce vehicle.

Amazon UK Sales After VAT Registration

Once your company is VAT registered, taxable UK Amazon sales generally need to be accounted for as taxable supplies at the appropriate VAT rate. At the standard 20% rate, a customer-facing price of £120 VAT-inclusive contains:

  • Net sale: £100
  • VAT: £20
  • Customer pays: £120

The £20 is not simply additional business income. It is VAT collected from the customer and accounted for to HMRC, subject to the business's VAT return and any eligible input VAT recovery. This distinction should be built into your pricing model.

Why this matters for Amazon sellers

Amazon businesses often calculate profitability using:

  • Product cost
  • Amazon referral fees
  • FBA fees
  • Advertising
  • Shipping
  • Returns
  • Storage
  • Currency conversion

VAT needs to be included in that calculation. A product that appears profitable before VAT may have a much smaller margin after the VAT treatment is properly accounted for.

Can Amazon Collect VAT for You?

Amazon can have VAT responsibilities in certain transactions, particularly under UK rules covering online marketplaces. For example, where qualifying overseas goods are sold to UK customers through an online marketplace, the marketplace can be responsible for charging and accounting for UK VAT.

HMRC also states that online marketplaces can be liable for VAT on goods of any value that are located in the UK at the point of sale and sold by an overseas business through the marketplace. However, this does not mean an Amazon seller can assume that Amazon handles every VAT obligation. The seller still needs to understand:

  • Its own VAT registration position
  • Import VAT
  • VAT on purchases
  • VAT treatment of sales
  • Inventory locations
  • Marketplace reports
  • VAT returns
  • Overseas VAT obligations
  • Record keeping

Amazon's tax collection mechanisms and your company's VAT compliance are related, but they are not necessarily the same thing.

What Is the £135 Rule for Amazon Sellers?

The £135 consignment threshold is particularly important for sellers shipping goods directly from outside the UK to UK customers. Where goods outside the UK are sold to UK customers and the total intrinsic value of the consignment is £135 or less, special VAT rules apply.

For qualifying marketplace transactions, the marketplace generally charges and accounts for the VAT at the point of sale. The £135 threshold applies to the total value of the consignment, not simply each individual product.

Example

An overseas seller sends one UK customer:

  • Product A: £45
  • Product B: £40
  • Product C: £35

The total consignment value is £120. The calculation therefore considers the £120 consignment rather than treating each product as a separate transaction. For consignments above £135, normal import VAT and customs rules generally apply.

What If Amazon Stores Your Products in the UK?

This is different from shipping each individual order directly from China to the UK. Suppose:

  1. Your UK company buys products from a manufacturer in China.
  2. The products are imported into Britain.
  3. They are placed into Amazon's UK fulfilment network.
  4. A UK customer subsequently buys one of the products.

The products were already in the UK when the sale occurred. The import and subsequent domestic sale need to be considered separately. This is why Amazon sellers should maintain a clear record of:

  • Import dates
  • Import declarations
  • Import VAT
  • Customs values
  • Warehouse location
  • Product ownership
  • Customer destination
  • Sales date

Good inventory records are therefore also part of good VAT compliance.

Can Amazon Sellers Reclaim Import VAT?

A VAT-registered business may generally recover eligible import VAT as input tax, provided the normal VAT recovery conditions are satisfied and the business has the necessary evidence. This can be important for Amazon sellers because importing a large shipment can create a significant VAT cash-flow impact. For example, a business importing £100,000 of stock may incur substantial import taxes and VAT depending on the goods and customs treatment.

If eligible, import VAT may be recoverable through the VAT return rather than becoming a permanent cost of the inventory. Import VAT should therefore be distinguished from customs duty and from VAT charged on the eventual retail sale. They are different parts of the transaction.

What Is Postponed VAT Accounting?

Postponed VAT accounting can be particularly useful for UK businesses importing stock. Eligible VAT-registered businesses can account for import VAT on their VAT return rather than necessarily paying it upfront when goods enter the UK. This can improve cash flow for an Amazon business that imports stock regularly.

For example, instead of paying import VAT at the border and waiting to recover it through a later VAT return, the business can account for the import VAT through the VAT return under the postponed VAT accounting rules. Amazon sellers should confirm eligibility and maintain the required import records rather than assuming every shipment qualifies.

What About Amazon Sales to Europe?

Selling from a UK company to European customers introduces another layer of VAT considerations. After Brexit, UK businesses selling goods into the EU cannot simply treat European sales as if they were domestic UK sales. The outcome can depend on:

  • Where the inventory is located
  • Where the goods are dispatched from
  • Customer location
  • Whether the customer is a consumer or business
  • Whether Amazon's European fulfilment network is used
  • Import arrangements
  • The applicable EU VAT rules

If you store inventory in an EU member state, you may create VAT registration obligations in that country. This is particularly important for sellers using Amazon's European fulfilment programmes. A UK VAT registration does not automatically cover VAT obligations in every EU country where your inventory is stored.

Amazon Pan-European FBA and VAT

Amazon sellers expanding across Europe should be especially careful with fulfilment settings. If inventory is moved between European countries by Amazon's fulfilment network, the seller can potentially create VAT obligations in multiple jurisdictions. That means European expansion should not be treated simply as a marketing decision. Before enabling additional fulfilment locations, consider:

  1. Where Amazon will store the inventory.
  2. Which countries your stock may move between.
  3. Whether local VAT registration is required.
  4. How imports are handled.
  5. Which VAT rates apply.
  6. Whether local VAT returns are required.
  7. Whether an accountant or VAT specialist needs to manage the registrations.

The important principle is simple: Where your inventory is stored can matter as much as where your customers are located.

Does a UK Company Automatically Have a UK VAT Number?

No. Companies House incorporation and HMRC VAT registration are separate processes. A company can be incorporated in the UK without being VAT registered. If the company becomes required to register, it must apply to HMRC and receive its VAT registration details.

The current registration process requires information such as business details, turnover information, UTR where available and estimates of taxable turnover. This distinction is important for new Amazon sellers who have recently incorporated a UK limited company. Company number ≠ VAT number. They are separate identifiers issued for different purposes.

Should a New Amazon Seller Voluntarily Register for VAT?

Voluntary VAT registration can make sense in some circumstances, but it should not be treated as automatically beneficial. Potential considerations include:

Input VAT recovery

A VAT-registered business may be able to recover eligible VAT on business purchases, including certain stock and import VAT.

Pricing

If most customers are consumers, adding VAT to prices can affect competitiveness or reduce the business's margin if prices cannot be increased.

Customer profile

If you primarily sell to VAT-registered businesses, the commercial effect of VAT can be different because business customers may be able to recover VAT subject to normal rules.

Administrative workload

VAT registration creates ongoing responsibilities, including VAT returns, records and compliance. For a rapidly growing Amazon business with significant taxable UK sales and substantial input VAT, voluntary registration may be worth considering. But the decision should be based on the business's actual numbers rather than a blanket assumption that VAT registration is always advantageous.

Amazon VAT Records: What Should You Keep?

A high-volume Amazon seller should maintain records that reconcile Amazon activity with the company's accounting system. Useful records include:

  • Amazon sales reports
  • VAT transaction reports
  • Settlement statements
  • Marketplace fees
  • FBA invoices
  • Advertising costs
  • Supplier invoices
  • Import documentation
  • Customs declarations
  • Import VAT evidence
  • Refunds and returns
  • Credit notes
  • Currency conversion records
  • Inventory movements

HMRC states that VAT records for relevant goods transactions must generally be retained for six years. The practical objective is to make it possible to move from:

Amazon order → marketplace report → accounting entry → VAT return

without unexplained differences.

Common VAT Mistakes Amazon Sellers Make

Assuming incorporation means VAT registration

A UK company can exist without being VAT registered.

Waiting until £90,000 before considering VAT

The £90,000 threshold is important, but specific circumstances can create VAT obligations independently of the normal turnover test.

Treating Amazon's payout as sales revenue

The amount Amazon transfers to your bank account may already have fees and other adjustments deducted.

Ignoring import VAT

Import VAT can be significant for businesses bringing large quantities of stock into the UK.

Assuming Amazon handles all VAT

Marketplace rules can shift VAT responsibility in particular transactions, but they do not eliminate the seller's wider compliance obligations.

Ignoring European inventory

Storing stock in another country can create local VAT responsibilities.

Using a virtual UK office as proof of VAT establishment

HMRC states that a registered, serviced or virtual office alone is unlikely to establish a business in the UK for VAT purposes.

A Practical VAT Checklist for Amazon Sellers

Before scaling an Amazon business, work through these questions:

1. Is the company VAT registered?

If not, determine whether registration is mandatory or whether voluntary registration makes commercial sense.

2. Where is your stock?

Map every location where Amazon or another fulfilment provider stores your inventory.

3. Where do your goods come from?

Document suppliers, countries of origin and import arrangements.

4. Who buys your products?

Distinguish consumers from VAT-registered business customers where relevant.

5. Which Amazon marketplaces do you use?

UK-only selling is very different from operating across Europe and other international markets.

6. Who is responsible for collecting VAT?

Determine whether your company or the marketplace is responsible for each transaction.

7. Are you recovering eligible input VAT?

Review stock purchases, professional services, advertising, fulfilment and import VAT.

8. Does your accounting system reconcile with Amazon?

Your VAT return should be based on reliable underlying records, not simply the amount paid into your bank account.

How IncorpUK Fits Into an Amazon Business Setup

For international founders establishing a UK e-commerce company, VAT is only one part of the broader business infrastructure. IncorpUK is a UK company formation and management platform for global founders who want to start and manage a UK company remotely. Its services can be relevant to the administrative side of establishing a UK company, including registered-office support and ongoing company management.

However, company formation does not automatically resolve VAT registration or Amazon tax compliance. Those obligations depend on the company's activities, turnover, inventory arrangements and selling markets.

Frequently Asked Questions

Does a UK limited company selling on Amazon need VAT registration?

Not automatically. The standard compulsory UK VAT registration threshold is currently more than £90,000 of taxable turnover over the relevant period, although other circumstances can create registration obligations. Voluntary registration is also possible.

Does Amazon require a UK VAT number?

Amazon may request VAT information depending on the seller's circumstances, marketplace and applicable requirements. However, Amazon's requirements and HMRC's legal VAT registration requirements are separate questions.

Can I sell on Amazon UK without being VAT registered?

Potentially, if your circumstances do not require VAT registration. However, you should monitor taxable turnover and consider whether your stock, importing arrangements or other circumstances create a registration obligation.

Does Amazon collect VAT from UK customers?

Amazon can be responsible for charging and accounting for VAT in certain transactions under UK marketplace rules, particularly involving overseas sellers and qualifying imported goods. This does not mean every Amazon seller's VAT obligations are handled automatically.

What is the £135 rule on Amazon?

The £135 rule concerns qualifying consignments of goods imported into the UK. For qualifying goods valued at £135 or less and sold through an online marketplace, the marketplace generally accounts for UK VAT at the point of sale.

Can I reclaim VAT on Amazon FBA fees?

If your business is VAT registered, eligible VAT on business expenses may generally be recoverable subject to the normal input-tax rules and appropriate documentation.

Can I reclaim import VAT on Amazon stock?

A VAT-registered business may be able to recover eligible import VAT, provided the relevant VAT recovery conditions and evidence requirements are satisfied.

Does UK VAT registration cover Amazon sales in Europe?

No. UK VAT registration does not automatically cover VAT obligations created by storing or selling goods in other countries. European fulfilment arrangements can require separate VAT registrations and returns.

Can a non-UK resident own a UK Amazon company?

A non-UK resident can own a UK company, but the VAT position depends on the company's actual establishment, activities, inventory and sales arrangements. Incorporation in the UK alone does not necessarily establish a business in the UK for VAT purposes.

Conclusion

VAT registration for Amazon sellers with a UK company is not determined by the company name, Amazon account or UK incorporation certificate alone. The real analysis starts with taxable turnover, inventory location, import arrangements, customer location, sales channel and fulfilment model.

For many UK Amazon businesses, the £90,000 taxable turnover threshold is the obvious starting point. But sellers using FBA, importing stock from overseas, selling through marketplaces or expanding into Europe need to look beyond that number. The most practical approach is to:

  • Monitor taxable turnover continuously.
  • Understand the VAT treatment of each product.
  • Track where Amazon stores your inventory.
  • Keep complete import and VAT records.
  • Understand the £135 consignment rules.
  • Separate import VAT from sales VAT.
  • Reconcile Amazon reports with your accounting records.
  • Review VAT obligations before expanding into new countries.
  • Get specialist advice when your fulfilment structure becomes complex.

For an Amazon founder, VAT is not just an accounting requirement. It can affect product pricing, margins, cash flow and international expansion. Building the correct VAT process alongside the business from the beginning is far easier than trying to reconstruct years of marketplace transactions after the business has already scaled.