Amazon fees and VAT can affect both your margin and your cash flow. The useful starting point is the actual invoice: check the supplier, the service, the VAT treatment and whether your business can recover the tax.
What happened in August 2024?
Amazon’s official announcement explained that relevant seller services would move from Amazon Services Europe to Amazon EU from 1 August 2024. It said businesses established in specified countries, including the UK, would be invoiced by the local branch with local VAT treatment.
This is a historical change, not a new 2026 tax. Do not assume that every fee on every transaction has identical VAT treatment. Review current invoices and credit notes, particularly for cross-border services.
Can you recover VAT on fees?
Recovery depends on your VAT registration, scheme, business use and the normal input tax rules. Being VAT-registered does not guarantee that every VAT amount is recoverable. If recovery is restricted, include the irrecoverable amount in your margin calculations.
If you are not registered, VAT charged on business purchases generally forms part of your cost. Registration also affects sales and administration, so assess the whole business rather than registering solely to recover fees.
Monitor the registration threshold
UK-established businesses generally need to register when taxable turnover exceeds £90,000 over a rolling 12-month period, or is expected to exceed that amount in the next 30 days alone. Different rules can apply to overseas businesses. Check HMRC’s registration guidance.
Keep settlement records clear
Reconcile gross sales, refunds, marketplace fees, VAT and reserves separately. Avoid counting only the amount paid into your bank. Keep invoices supporting VAT entries and review any automated software mappings before relying on them.
Our VAT services and Amazon seller tax guide can help you identify the next checks for your business.
Book an introductory call to discuss your business.
Reviewed and updated: 24 October 2026.
