Do you sell on Amazon and you don’t know what will be the consequences of Brexit entry from January 1, 2021? How will UK VAT be charged on sales to UK customers? In the article below, we present information that is also available on Amazon, which we hope will clear some doubts for you.

As reported by Amazon on its website, from January 1, 2021, Amazon will be responsible for collecting British VAT. Tax will be levied on the following sales of goods delivered to UK customers, if ordered through any Amazon facility, in cases where:

• Goods shipped from non-UK warehouses worth up to £ 135;

• The goods are delivered from warehouses located in Great Britain and the seller is not based in Great Britain. The value of the products is irrelevant in this case.

In these cases, Amazon will calculate and collect UK VAT from the customer at the ‘checkout’ and pass it directly to the UK tax authorities. You will not receive the UK VAT amount in your withdrawals and you will not have to transfer these amounts to the UK tax authorities.

Please note that sales of goods below £ 15 are currently exempt from paying VAT. This concerned goods delivered to customers in Great Britain from inventories outside Great Britain. This facility will also be removed from January 1, 2021. Amazon will calculate and collect UK VAT on their sales. The value of these products will not matter. 

You will continue to be responsible for accounting for any UK VAT on any other supplies. Shipments to UK business customers registered as VAT taxpayers will be subject to taxation. Further information on this change and the implications for your business is available on the Regulatory Help page regarding e-commerce in Great Britain.

Preparing for this change:

To best prepare your business for this change in levying UK VAT on sales to UK customers, we recommend the following:

1. Review and update your Seller Center account details.

Make sure the VAT details of your Seller Center account are accurate and up to date by checking:

• Your company address. Visit the company address.

• Your default shipping address. Visit Shipping settings.

• Your VAT registration numbers. Visit the VAT calculation settings.

It is recommended that you review this information regularly to keep it up to date. For more information on the data to provide and how Amazon uses this data to calculate VAT on your Amazon transactions and fees, see here.

2. Review your list prices to make sure they include VAT

Check price settings to make sure they include applicable VAT. You must provide market retail prices, which include all applicable taxes, including VAT, for this storefront. Visit the Inventory Management page.

3. Review and update information on VAT invoices and reports
Make sure your UK VAT compliance processes are ready by confirming changes to:

• Amazon VAT Transaction Report (AVTR): New attributes will be added to help you identify where Amazon is responsible for collecting and remitting VAT.

• VAT Calculation Report (VCR): New attributes will be added to help you identify where Amazon is responsible for collecting and remitting VAT. 

• VAT invoicing: You should no longer issue VAT invoices to your customers for sales for which Amazon collects and pays UK VAT. In the event of such a sale, it will be possible to download invoices issued by Amazon from the Merchant Center. 

4. Confirm actual shipping address when confirming shipping
Please include your shipping address when confirming shipment if you are shipping goods directly to the customer. If you are using the Orders API to confirm shipping, you need to update your system to share and display the delivery address via the API. 

5. Remember to ship each order received from a customer in a separate, single shipment
Please ensure that each order received within one order is shipped separately to the customer if you are shipping goods directly to the customer. 
Please note that the above changes do not change the obligations related to VAT registration. Visit our dedicated VAT information pages to learn more about your VAT obligations. If you need help with registering and completing VAT documents in Great Britain, Germany, France, Italy, Spain, Poland and the Czech Republic, please visit VAT Services on the Tick site to register today.