Do I need to register for VAT for Amazon FBA in the UK?

UK VAT is the single biggest tax issue for Amazon FBA sellers. Get it wrong and HMRC will catch up — often years later, with interest and penalties. The rules are actually simple once you understand the threshold and how output/input VAT works.

The £90,000 threshold (updated April 2024)

You MUST register for UK VAT once your taxable turnover crosses £90,000 in any rolling 12-month period. "Rolling" means you check the LAST 12 months, not a calendar year. Cross the threshold in November 2026? Look back to November 2025. If the total is over £90k, register within 30 days. The threshold rose from £85k to £90k in April 2024 — don't use older guides citing the old number.

How VAT works mechanically

Once VAT-registered, every sale on Amazon UK includes 20% VAT in the price. You don't see a separate VAT charge — Amazon prices include VAT. So a product sold for £14.99 actually breaks down as £12.49 (your revenue) + £2.50 (VAT to remit to HMRC). On the input side: every business purchase from a VAT-registered UK supplier (or VAT-registered EU supplier under reverse charge rules) includes 20% VAT, which you can RECLAIM. So a £6 wholesale unit actually costs you £5 net — the £1 VAT comes back to you. Quarterly, you submit a VAT return showing: Output VAT (what you collected on sales) − Input VAT (what you paid on inputs) = Net VAT owed to HMRC.

Should I register voluntarily before the threshold?

For most UK Amazon FBA sellers under £90k turnover, voluntary VAT registration is a NET LOSS. Here's why: your customers don't care that you're VAT-registered (Amazon prices include VAT regardless), so you can't raise prices to cover the new VAT remittance. You essentially LOSE 16.7% of revenue (the VAT portion of your sale price) to HMRC. The exception: if your inputs are heavily VAT-bearing (lots of UK wholesale purchases on VAT invoices) and your outputs include zero-rated items (some food, books, children's clothes), the input reclaim might exceed output VAT — making registration profitable. Get this analysed by a UK FBA-aware accountant before voluntarily registering.

Common UK FBA seller VAT mistakes

(1) Not tracking turnover monthly — sellers cross £90k by surprise and miss the 30-day registration deadline. (2) Missing the rolling-12-months rule — checking calendar year not rolling. (3) Not keeping VAT invoices for purchases — you can't reclaim what you can't prove. (4) Not understanding the Flat Rate Scheme — for sellers under £150k turnover this can simplify VAT but loses the input reclaim. (5) Mixing personal and business expenses — HMRC doesn't accept "I think I bought that for the business" without records.

What about the One Stop Shop (OSS) for EU sales?

If you sell into EU customers (Amazon UK ships abroad sometimes), you may also need to register for the EU's Import One Stop Shop (IOSS) or the standard VAT MOSS. This is a separate registration in an EU country (commonly Ireland for English-speaking sellers). For most UK FBA sellers selling primarily to UK customers, this isn't needed — but check with an accountant if EU sales become significant.

Disclaimer

This is general information, not tax advice. UK VAT rules change, your specific situation matters, and HMRC penalties for getting this wrong are significant. Consult a UK accountant familiar with Amazon FBA before making decisions. Inner Circle FBA partners with several UK FBA-aware accountants — full list at /partners.