1. UK VAT via marketplaces: consignments of £135 or less sold to GB customers through an online marketplace → the marketplace accounts for VAT at sale; above £135 normal import VAT and customs rules apply. Source: HMRC Guidance: Marketplace Charging VAT.
2. UK VAT direct sales: overseas goods of £135 or less sold directly to GB customers have UK supply VAT charged at point of sale. Source: HMRC Guidance: Overseas Goods Sold Directly. Last reviewed: 15 October 2026.
Understanding the Post-Brexit UK VAT £135 Framework
Following the UK's exit from the European Union on 1 January 2021, the United Kingdom abolished Low Value Consignment Relief (LVCR). In its place, HM Revenue & Customs (HMRC) established a deemed supplier model for e-commerce transactions involving consignments with an intrinsic value of £135 or less.
Under this statutory regime, when an overseas seller sells goods situated outside the UK to a retail customer in Great Britain through an online marketplace like Amazon, Amazon is treated as the deemed supplier. Amazon automatically calculates, collects, and remits the 20% UK supply VAT directly to HMRC. This fundamentally alters pricing dynamics and cash flow for international Amazon brands.
Who It Affects: Seller Scenarios
FBA Storage: If a US brand imports commercial bulk inventory into a UK Amazon fulfillment center, the brand is physically storing goods in the UK. As a Non-Established Taxable Person (NETP), the brand has a NIL VAT threshold and must hold a UK VAT registration and GB EORI number [VERIFY: HMRC NETP Registration Rules | gov.uk]. However, for retail sales under £135 facilitated by Amazon, Amazon still accounts for the output VAT at checkout.
Direct MFN Dropship: If shipping individual parcels under £135 directly from the US to UK buyers, Amazon collects the 20% VAT at checkout, and the parcel enters Great Britain free of import VAT.
In the European Union, the equivalent mechanism is the Import One-Stop Shop (IOSS) for consignments up to €150. Above €150, normal import VAT and customs duties apply upon customs entry into the EU member state.
UK sellers exporting products across the English Channel to EU buyers cannot apply UK domestic VAT rules. Sales into the EU are treated as zero-rated exports from the UK, and are subject to destination EU VAT collected either via Amazon IOSS (under €150) or import VAT at the EU border.
Amazon UK VAT Action Checklist
Where SellerVine Helps (Amazon Operations Only)
SellerVine operates strictly on the Amazon marketplace and catalog layer. We assist brands with catalog attribute mapping, flat file safety information batch updates, Account Health compliance dashboard document submission, and listing suspension appeals. We do not provide statutory legal representation, tax advice, or act as an EU Authorized Representative.
Request a Seller Central Compliance AuditLast reviewed: 15 October 2026.
Disclaimer: General information, not legal or tax advice. Statutory regulations, member state enforcement directives, and customs procedures evolve. Brands must consult qualified legal counsel, authorized representatives, or chartered tax advisors for formal certification.
Frequently Asked Questions
How does the £135 rule work for Amazon UK marketplace sales?
For consignments of £135 or less sold to GB customers through an online marketplace by an overseas seller, the marketplace accounts for supply VAT at point of sale. Normal import VAT applies above £135. Source: HMRC Guidelines.
Does a US seller storing inventory in UK FBA need a UK VAT number?
Yes. Non-established overseas businesses storing inventory in UK fulfillment centres have a NIL VAT registration threshold and must register for UK VAT to reclaim import VAT and hold inventory legally.
Are Amazon referral fees calculated on the gross or net price in the UK?
Amazon calculates referral fee percentages against the total gross retail price paid by the consumer, including VAT.
Does the £135 threshold include shipping and insurance?
No. The £135 intrinsic value threshold applies strictly to the value of the commercial goods themselves, provided freight and insurance charges are itemized separately.
What happens to consignments over £135?
For consignments exceeding £135, normal UK import VAT and customs duty rules apply at the border rather than marketplace point-of-sale withholding.