UK VAT
Why the same product can be taxed at 20% on one order and 0% on the next — and how to tell them apart.
Last updated: 19 September 2026
Short answer: for a VAT-registered seller shipping from the UK, an Amazon sale is standard-rated (20%) when the customer receives the goods in the UK, and zero-rated when the goods are exported — to the EU, the Channel Islands or anywhere else outside the UK. Orders where Amazon collects the VAT as a marketplace facilitator are also zero-rated for you. What decides it is the order's ship-to country, which isn't shown in the settlement report.
| Where the goods go | Your VAT treatment | Xero tax rate |
|---|---|---|
| England, Scotland, Wales, Northern Ireland | Standard-rated (or the product's own rate) | 20% (VAT on Income) |
| EU customer, parcel €150 or less | Amazon collects EU VAT; your sale is zero-rated | Zero Rated Income |
| EU customer, parcel over €150 | Export — zero-rated | Zero Rated Income |
| Jersey, Guernsey, Isle of Man* | Channel Islands: export, zero-rated. Isle of Man: treated as UK | Zero Rated Income / 20% |
| USA, Norway, rest of world | Export — zero-rated | Zero Rated Income |
*The Isle of Man is part of the UK VAT area; the Channel Islands are not.
"Standard-rated" assumes the product is taxed at 20%. Some goods have their own UK rate regardless of where the customer is in the UK — most books and children's clothes are zero-rated, and some products are 5%. Amazon applies the product's tax code when it calculates VAT, so a UK order with no VAT row may be a zero-rated product rather than an export.
The settlement report lists the order ID, price, VAT and fees, and names the marketplace — but not where the parcel went. An Amazon.co.uk order to a customer in Dublin looks almost identical to one delivered in Leeds. The clues it does give:
The third case is the one that goes wrong. To be sure, you need each order's ship-to country from Amazon's order data. (If you're VAT-registered, switching on Amazon's VAT Calculation Service in Seller Central also makes the Tax rows far more reliable.)
You can download order reports from Seller Central and match them to settlements by order ID. Two practical limits: Amazon only keeps customer address details available for a limited time (roughly two years), and matching thousands of orders by hand is slow. Capture the country close to when each settlement is processed, while it's still available.
TrueBooks fetches each order's ship-to country from Amazon when it imports a settlement and stores it with the settlement lines. Orders shipped outside the UK are posted as zero-rated exports, Marketplace Facilitator orders to their own zero-rated line, and UK orders at the standard rate — with the matching treatment on each order's FBA fees. See the Amazon Xero integration.
General information for sellers based in Great Britain, not tax advice. Check your position with your accountant.
Yes. The Channel Islands are outside the UK for VAT, so goods sent there from the UK are exports and zero-rated, provided you have evidence of export.
No. Customers anywhere can buy on Amazon.co.uk. What decides the VAT is where the goods are sent from and to, not which Amazon website the order was placed on.
Proof the goods left the UK, such as carrier or postal records. When Amazon ships the order through FBA, Amazon's shipment records provide this; keep your order and shipment reports with your VAT records.
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