ICAEW.com works better with JavaScript enabled.
Exclusive content
Access to our exclusive resources is for specific groups of students, users, members and subscribers.
Q: My client is a UK-based, UK VAT-registered business that sells UK-located goods to UK consumers via Amazon Marketplace. Previously my client had to account for the VAT on these sales, but now Amazon says that it is dealing with the VAT on these sales. Is it correct that my client no longer has to account for VAT on this income?

Probably not.

When a non-UK business sells from UK stock to UK consumers, via an online marketplace (e.g. Amazon), there are special rules that 'deem' the marketplace to be selling those goods to the consumer. The marketplace must account for the UK VAT on that sale and the non-UK seller is 'deemed' to be selling zero-rated to the marketplace (enabling UK VAT registration and recovery of purchase or import VAT).

As your client is UK-based, your client remains liable for the UK VAT on its sales in the normal way.

Your client should check its Ts&Cs with Amazon and explain its UK-based status as it appears Amazon is treating your client as a non-UK seller. This can happen, for example, when sellers do not complete their Amazon Seller forms correctly.

Disclaimer

These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.

About Markel Tax

Markel Tax offers expert advice on UK tax and VAT via its helpline and provides monthly FAQs with questions and answers on common tax issues for businesses and practitioners.