UK Seller Alert: Amazon VAT Changes from 1 August 2024

Amazon has recently announced changes in the VAT treatment of fees that will significantly impact UK sellers. You can read more about this here (Amazon Seller Central login required).

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.

However, from 1 August 2024, Amazon will be billing UK VAT-registered sellers for fees from inside the UK. The impact of this is that UK sellers will now be charged VAT and will need to claim back this VAT on their VAT return going forward.

We believe that the fees that will be impacted will be:

• FBA Fees
• Merchant Seller Fees
• Subscription Fees

Sellers will need to account for this change when considering both the cost of these fees and the impact on their cash flow and report them correctly on their VAT return as per HMRC regulations.

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 will be taking the following steps to support our UK customers through this transition period:

1. Updating all of our automation tax rules to reflect these changes from 1 August 2024 (see below for examples).
2. Providing a process for our UK customers with existing set-ups to update their tax treatment on Amazon fees from 1 August 2024.
3. 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.
4. Proactively monitoring the situation and providing you with regular updates as these changes are rolled out.

A2X Settings Before 1 August 2024

A2X Settings After 1 August 2024

As Product Ads fees are currently billed from AO (Amazon Online) rather than ASE (Amazon Services Europe S.à r.l.), we do not believe they will be impacted by these upcoming changes.

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.

Learn more about the Amazon VAT changes and how to prepare for them in our webinar with Elver E-Commerce Accountants and Swoop.