UK E-Commerce VAT & Amazon FBA Guide for Non-Residents 2026

If you sell products on Amazon UK using FBA (Fulfilment by Amazon) and you are not based in the UK, you face a set of VAT obligations that catch many non-resident sellers off guard. Unlike UK-based businesses, overseas FBA sellers must register for UK VAT immediately — there is no £90,000 turnover threshold exemption when your stock sits in a UK warehouse. This guide explains exactly what you need to know in 2026.

Who Must Register for UK VAT

The standard UK VAT registration threshold is £90,000 of taxable turnover in a rolling 12-month period. However, this threshold does not apply in the following situations relevant to FBA sellers:

• Non-resident businesses with UK stock: If you store goods in any UK location — including Amazon FBA warehouses — you must register for VAT immediately, regardless of turnover. Registration is required before the first goods arrive.
• Non-resident businesses selling to UK customers from overseas stock (goods ≤ £135): Amazon acts as the deemed supplier and accounts for VAT on these sales, but HMRC still recommends the seller registers to report non-Amazon sales.

In practice: if you are a Chinese, Hong Kong, US, or any non-UK seller using Amazon FBA in the UK, you need a UK VAT number before shipping your first inventory to Amazon's UK fulfilment centres.

The Deemed Supplier Rules

Since 1 January 2021, HMRC's deemed supplier rules apply to online marketplaces including Amazon, eBay, and Etsy. Under these rules:

Sale Type	Who Accounts for VAT
Overseas seller, goods imported into UK, sold to UK consumer, value ≤ £135	Amazon (marketplace) — not the seller
Non-UK established seller, goods already in UK, sold to UK consumer (any value)	Amazon (marketplace) — not the seller
UK-established seller, goods in UK, sold to UK consumer	Seller
Any seller, goods in UK, sold to VAT-registered UK business (B2B)	Seller

The deemed supplier rules mean Amazon collects and remits VAT to HMRC for most of your B2C sales from UK FBA stock. However, you still need to be VAT-registered to reclaim import VAT and to handle B2B sales (where you issue a VAT invoice and account for VAT yourself).

Amazon will show these transactions in your VAT Transaction Report in Seller Central — you report them on your VAT return as "sales where customer accounts for VAT" (Box 6 only, no output tax).

Import VAT: Paying and Reclaiming

When you ship inventory from China (or elsewhere) to UK Amazon FBA warehouses, the goods cross the UK border and import VAT at 20% is charged. This is a significant cash flow item — on a shipment worth £50,000, import VAT would be £10,000.

If you are UK VAT-registered, you can reclaim this import VAT as input tax on your VAT return, subject to:

• Having a valid import declaration (C88 form / E2 certificate from HMRC)
• Using the correct EORI number (Economic Operators Registration and Identification number — required to import into the UK)
• The goods being for your business use (which FBA inventory clearly is)

This is a key reason to register for VAT before importing: unregistered sellers cannot reclaim import VAT, turning a recoverable tax into a permanent cost of goods. For sellers with significant inventory, this alone can justify early voluntary registration.

Alternatively, you can use Postponed VAT Accounting (PVA) — a UK scheme allowing import VAT to be accounted for on your VAT return rather than paid upfront at the border. PVA improves cash flow significantly for regular importers.

How to Register for UK VAT

Non-resident businesses can register for UK VAT online through HMRC's Government Gateway. The process:

1. Create a HMRC Government Gateway account (if you do not already have one)
2. Complete the VAT registration form (VAT1) online — for non-residents, select "I am not established in the UK"
3. Provide: company name, address, nature of business, expected taxable turnover, bank details
4. HMRC processes the application — typically 4–8 weeks, but can be faster
5. You receive a VAT registration certificate showing your VAT number and effective date of registration

You must also obtain an EORI number to import goods into the UK — apply separately on the HMRC website. Registration for VAT and EORI are separate processes.

Making Tax Digital (MTD) for VAT

All UK VAT-registered businesses must file VAT returns through Making Tax Digital (MTD) compatible software — paper returns are not accepted. Popular options for Amazon FBA sellers:

• A2X — specifically designed for Amazon and e-commerce VAT accounting; reconciles Amazon settlements to VAT returns automatically
• Link My Books — similar to A2X, integrates with Xero or QuickBooks
• Xero + A2X — common combination for FBA sellers with more complex accounts
• QuickBooks — general accounting software with MTD VAT filing capability

VAT returns are typically due quarterly, with payment due 1 month and 7 days after the quarter end. For example, for a Jan–March quarter, the return and payment deadline is 7 May.

EU VAT: IOSS and What Changed After Brexit

After Brexit, UK companies are treated as non-EU sellers for EU VAT purposes. If you sell goods from the UK into EU countries to consumers:

• Goods valued up to €150 (including UK goods posted to EU consumers): You can use the IOSS (Import One-Stop Shop) scheme. IOSS allows you to register once in an EU member state and report all EU B2C sales there. UK companies must use an EU-established IOSS intermediary to register (EU fiscal representative).
• Goods valued above €150: Import VAT is charged at the EU border. You may need to register for VAT in each EU country where you store stock, or appoint a fiscal representative.
• Amazon EU Pan-European FBA / Multi-Country Inventory: If Amazon moves your inventory across EU warehouses (e.g., Germany, France, Italy), you will have VAT obligations in each country where stock is held — separate from your UK VAT registration.

Late Filing & Payment Penalties

HMRC introduced a new VAT penalty regime from January 2023:

• Late submission penalties: Points-based system — 1 point per late return; penalty of £200 when threshold is reached (4 points for quarterly filers)
• Late payment penalties: 2% of outstanding VAT after 15 days; 4% after 30 days; daily accruing penalties after 31 days
• Interest: HMRC charges late payment interest at 2.5% above the Bank of England base rate

The points system gives sellers a buffer for occasional late filings but penalises persistent lateness. Points reset after a full year of compliance.

Further reading: UK Company for E-commerce Sellers: Amazon UK, Etsy, Shopify FX for UK E-commerce Sellers 2026.

Frequently Asked Questions