UK VAT
Why Amazon started adding UK VAT to seller fees, and how to account for fees on each side of the change.
Last updated: 19 September 2026
Short answer: from 1 August 2024, Amazon bills UK sellers' fees from Amazon EU S.à r.l.'s UK branch and adds 20% UK VAT. Before that, most fees were billed from Luxembourg by Amazon Services Europe S.à r.l. with no VAT, and VAT-registered sellers used the reverse charge. Fees up to 31 July 2024 use Reverse Charge Expenses; fees from 1 August 2024 use 20% VAT on Expenses, which you can normally reclaim.
VAT on a service depends on where the supplier is. When fees came from a Luxembourg company with no UK establishment, the UK buyer accounted for the VAT under the reverse charge. Once the fees were billed by a UK branch, the supplier became UK-based and had to charge UK VAT directly.
| Up to 31 July 2024 | From 1 August 2024 | |
|---|---|---|
| Billed by | Amazon Services Europe S.à r.l. (Luxembourg) | Amazon EU S.à r.l., UK branch |
| VAT on the invoice | None | 20% UK VAT |
| VAT-registered seller | Reverse charge (Box 1 and Box 4, net nil) | Pays the VAT, reclaims it in Box 4 |
| Not VAT-registered | No VAT paid | Pays 20% more, can't reclaim |
| Xero tax rate | Reverse Charge Expenses (20%) | 20% (VAT on Expenses) |
The change applies to Amazon's selling-related fees: referral fees and commission, variable closing fees, the monthly subscription, FBA fulfilment fees, storage fees, removal and disposal fees, and other service fees such as Vine and coupon charges. Advertising was already billed with UK VAT and didn't change.
A settlement running, for example, from 25 July to 8 August 2024 contains fees from both periods. Each fee must use the treatment for its own date:
Settlement reports record a date and time for every row, so the fees can be split accurately. Applying a single treatment to the whole settlement overstates or understates Box 4 for that return.
In a settlement spanning the change, a seller has £600 of FBA fees dated in late July and £900 dated in early August.
Posting all £1,500 at 20% VAT on Expenses would instead claim £250 in Box 4 — £100 more than is actually reclaimable.
You can't reclaim the new VAT, so from August 2024 your Amazon fees cost 20% more. Before the change, the value of reverse-charge services you received counted towards the VAT registration threshold; it's worth checking that you considered this if you were close to the threshold before August 2024.
TrueBooks checks the date of every fee row. Fees before 1 August 2024 are posted with the reverse charge and fees from that date with 20% VAT on Expenses — even inside a single settlement — while advertising always carries UK VAT. See the Amazon Xero integration.
General information, not tax advice. Check your position with your accountant.
The fees themselves didn't change, but 20% VAT is now added to them. VAT-registered sellers can normally reclaim it, so the real cost is the same. Sellers who aren't VAT-registered can't reclaim it, so their fees effectively rose by 20%.
No. Amazon's UK advertising was already billed with 20% UK VAT before August 2024, so there was no change to how it's recorded.
Only if they were posted with the wrong treatment. Fees dated up to 31 July 2024 should use the reverse charge; fees from 1 August 2024 should carry 20% VAT. If your software applied one treatment to both, the returns covering mid-2024 may need correcting.
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