UK Seller Alert: Amazon VAT Changes [October 2024 UPDATE]

As of 1 August 2024, Amazon updated its VAT treatment on selling and fulfillment fees. Amazon now charges domestic VAT on selling and fulfillment fees based on the seller’s country, rather than applying the reverse charge mechanism.

Previously, UK VAT-registered sellers only paid VAT on UK advertising fees which were billed from London. All other fees were billed from Luxembourg and generally fell under the Reverse Charge Mechanism.

The changes do not affect the VAT treatment of advertising fees, which will continue to be invoiced separately.

However, sellers now pay VAT on Amazon fees and must reclaim it on their VAT returns.

October 2024 update: Important notes about the Amazon VAT changes

Initially, it appeared that all Amazon FBA fees across the EU/UK would be subject to 20% VAT. However, after reviewing the invoices for August across multiple sellers, we’ve noted the following details about the Amazon VAT changes.

Merchant Seller Fees

Merchant Seller Fees invoices generally include VAT at 20% for all marketplaces, but there are some exceptions to this rule.

FBA fee splits

UK-based sellers using FBA to ship internationally are now seeing two invoices for FBA fees: one with 20% VAT for orders shipped within GB and one zero-rated for international shipments.

A2X is updating its mapping to reflect these changes. For support, book a call with our team at contact@a2xaccounting.com.

Credit notes and invoices

During the August 2024 transition, Amazon issued credit notes and backdated invoices covering earlier periods with different tax treatments, resulting in mixed tax rates for FBA fees. For example, an FBA fee from 1 July may be categorized as a Reverse Charge Expense.

To account for these, sellers can either use a manual journal entry or A2X’s clearing account workaround for accurate reporting.

Watch our webinar featuring Elver E-Commerce Accountants for more details about the changes and how to account for your Amazon numbers in August-September 2024.

How can A2X help?

Here at A2X, we are constantly monitoring new updates in the world of ecommerce to support you through any transitions in your tax reporting requirements. We have a whole suite of functionality that can help you remain tax compliant, regardless of where you are selling in the world.

We are offering free one-time 30-minute VAT mapping support calls for any of our sellers or accountant and bookkeeper partners who are concerned about the changes and would like a full A2X VAT setup review, regardless of their A2X plan – email contact@a2xaccounting.com to book a call.

We will continue proactively monitoring the situation and providing you with regular updates as these changes are rolled out.

Note: As always, we recommend taking independent advice from your accountant or tax expert on these changes. We are always here to help so please reach out to us if you would like to discuss these changes with one of our UK support team VAT experts ( contact@a2xaccounting.com). We are also always happy to include your accountant, bookkeeper, or tax advisor on a call.