Who collects VAT when I sell on Amazon UK from UK stock?

You collect and remit VAT to HMRC when you sell from UK stock through Amazon FBA or any other UK fulfilment method. Amazon does not act as a marketplace facilitator for sales where the goods are already in the UK at the point of sale. You charge VAT at checkout, report it on your VAT return in Box 6, and include the net sale in Box 1. The marketplace facilitator rule applies only when goods are outside the UK and the order is £135 or less.

What is the £135 threshold for marketplace facilitator VAT?

The £135 threshold is the intrinsic value of the goods in a consignment, excluding shipping, insurance, and VAT. If the total value of an order is £135 or less and the goods are located outside the UK at the point of sale, the platform collects UK VAT and remits it to HMRC. Orders above £135 do not fall under the facilitator rule; the buyer pays import VAT at the border if the goods are shipped from overseas, or the seller charges VAT if the goods are in UK stock.

Do I report marketplace facilitator VAT on my VAT return?

No. When the platform collects VAT under the marketplace facilitator rule, you do not report that VAT on your VAT return because the platform accounts for it directly to HMRC under its own VAT registration. You include only the net sale proceeds in your revenue accounts. You report VAT only on sales where you were the supplier, such as UK FBA orders or any sale where the goods were in the UK at the point of sale.

Does TikTok Shop collect VAT in the UK like Amazon?

Yes. TikTok Shop applies the UK marketplace facilitator rule to sales where goods ship from overseas (typically China) and the order value is £135 or less. TikTok collects VAT at checkout and remits it to HMRC, and you see a "Marketplace Facilitator Tax" line in your seller dashboard. If you fulfil from UK stock, you charge and report VAT yourself. The rule is identical in principle to Amazon's implementation.

Can I use Postponed VAT Accounting when the platform collects VAT?

No. Postponed VAT Accounting (PVA) applies to import VAT you pay at the UK border and then reclaim as input tax on the same VAT return. When the marketplace facilitator rule applies, the platform collects VAT at the point of sale and remits it to HMRC, so there is no border charge and no import VAT to defer. PVA is relevant only for consignments above £135 or for sales where the facilitator rule does not apply.

Marketplace Facilitator VAT: When Amazon or TikTok Collects Tax

When you sell through Amazon, TikTok Shop, or eBay, you need to know who is responsible for charging and paying VAT to HMRC: you or the platform. Under UK marketplace facilitator rules introduced in January 2021, the platform collects and remits VAT on qualifying sales instead of the seller. The rule applies to sales of goods by non-UK sellers to UK consumers, and to sales by any seller (UK or overseas) where the consignment value is £135 or less and the goods are outside the UK at the point of sale.

This means if you are a UK-registered seller fulfilling orders from UK stock through Amazon FBA or TikTok Shop, the platform does not usually act as the facilitator for those transactions — you charge VAT, collect it, and report it on your VAT return. But if you ship low-value goods directly from China or use overseas fulfilment, the platform often becomes the deemed supplier and handles VAT. The distinction turns on where the goods are located and who owns them at the point of sale, and it directly affects what you report to HMRC and what appears on your settlement statements.

What the marketplace facilitator rule is and why it exists

For related context, see our Shopify and D2C ecommerce accounting guide.

The UK marketplace facilitator VAT rule is part of the wider overseas goods VAT regime that HMRC introduced on 1 January 2021 to replace the old Low Value Consignment Relief. The policy aims to collect VAT at the point of sale on low-value imports, rather than at the border, and to shift compliance liability from thousands of overseas sellers onto a smaller number of large platforms.

When the rule applies, the platform is treated as the supplier for VAT purposes. It must charge UK VAT at the standard rate (20 per cent as of 2025), collect the tax from the buyer, and account for it to HMRC under its own VAT registration. The actual seller — whether based in Shenzhen, Birmingham, or Berlin — does not charge VAT on that transaction and does not report the sale on their own VAT return. The platform deducts the VAT and any fees from the gross sale price, then remits the net proceeds to the seller.

HMRC publishes a full technical breakdown in VAT Notice 700/1, which covers the deemed-supplier provisions, the £135 threshold, and what counts as "outside the UK at the point of sale".

When Amazon, TikTok Shop, and eBay collect VAT under the facilitator rule

The rule triggers when all of the following conditions are met:

The goods are sold to a UK consumer (B2C transaction; business buyers with a valid VAT number are excluded).
The consignment value is £135 or less. This is the intrinsic value of the goods, excluding shipping, insurance, and VAT.
The goods are located outside the UK at the point of sale. This includes goods in a warehouse in China, the EU, or the US awaiting despatch, and goods already in transit but not yet cleared by UK customs.

When these conditions are met, the platform becomes the deemed supplier and charges VAT. For UK-registered sellers using Amazon FBA with inventory in a UK fulfilment centre, the goods are already in the UK at the point of sale, so the facilitator rule does not apply — you remain the supplier, you charge VAT, and you report the sale on your VAT return. The same logic applies to TikTok Shop UK if you use a UK fulfilment partner or ship from UK stock.

If you are a UK seller dropshipping from China or using Amazon's EU or US FBA network to fulfil UK orders, the platform will apply the facilitator rule to those sales. You will see a line in your settlement report labelled "Marketplace Facilitator VAT" or similar, and the platform will not remit VAT to you because it has already paid HMRC directly. This is not an error — it is the correct treatment under the overseas goods rules.

Amazon UK and Pan-EU FBA

Amazon acts as the marketplace facilitator for sales where the goods are in an overseas fulfilment centre (including EU FBA nodes under Pan-European FBA) and the order value is £135 or below. Amazon's Seller Central dashboard flags these transactions in the settlement report with a separate VAT line. If you are registered for VAT in the UK, you do not include these sales in Box 6 (output VAT) of your return because Amazon has already accounted for the tax. You do include the net sale value in your accounts as revenue, but the VAT element never touches your VAT return.

For UK FBA sales, you remain the supplier. Amazon does not collect VAT; you add it to the sale price, and you report both the net and VAT figures on your VAT return in the normal way. Check the "transaction type" column in your settlement report to confirm which rule applied to each order.

TikTok Shop UK

TikTok Shop operates a similar model. When you ship directly from an overseas warehouse (common with TikTok's integrated logistics partners in China) and the order is under £135, TikTok collects VAT at checkout and remits it to HMRC. Your seller dashboard will show "Marketplace Facilitator Tax" or "VAT Collected by Platform" on the transaction detail. If you hold stock in the UK and ship domestically, you charge VAT yourself and report it on your return. TikTok's seller policies explain the distinction, though the wording changes as the platform iterates its UK compliance documentation.

eBay UK

eBay applies the facilitator rule only to sellers who are not established in the UK (non-UK business sellers or private sellers shipping from abroad). If you are a UK-registered business selling on eBay and your goods are in the UK, eBay does not collect VAT — you do. However, if you are a UK seller using eBay's Global Shipping Programme or dropshipping from China, and the consignment is £135 or less, eBay may step in as the facilitator. eBay's VAT guidance provides transaction-level rules, though it is written for a mixed international audience and can be less precise than Amazon's documentation.

What you report to HMRC and what you do not

When the platform collects VAT under the facilitator rule, that VAT does not appear on your VAT return. You report only the net sale proceeds as revenue in your accounts. HMRC receives the VAT directly from the platform under the platform's own VAT number, and the transaction does not flow through your books as output tax. This means your Box 6 figure (total VAT charged) will be lower than you might expect if you naively gross up all sales by 20 per cent, because some of those sales were deemed supplies by the platform.

Conversely, when you are the supplier (UK stock, or over-£135 orders), you must charge VAT, collect it, and report both the net value (Box 6 output tax) and the VAT-inclusive figure (Box 1 VAT on sales). Mixing the two categories is the most common error we see in ecommerce accounting when a seller uses multiple fulfilment models. Your accountant needs your full settlement report, broken down by transaction type, to code each sale correctly.

Worked example: mixed fulfilment on Amazon

You are a UK VAT-registered seller. In Q1 2025 you make £60,000 of sales through Amazon UK: £40,000 from UK FBA stock (you are the supplier) and £20,000 from EU FBA stock shipped to UK buyers under the facilitator rule. Your output VAT on the £40,000 UK FBA sales is £8,000 (at 20 per cent), which you report in Box 6. The £20,000 EU FBA sales do not generate output VAT for your return because Amazon collected and remitted the VAT. Your total revenue for accounts purposes is £60,000 net, but your VAT return shows £40,000 net sales and £8,000 output tax. If HMRC queries the gap between your revenue and your VAT base, you produce the Amazon settlement report showing the facilitator transactions.

The £135 threshold and what happens above it

The facilitator rule applies only to consignments of £135 or less. The £135 figure is the intrinsic value of the goods excluding shipping, insurance, and taxes. If a single order contains multiple items, HMRC treats the whole consignment as one unit for threshold purposes — you do not split a £200 order into two £100 packages to bring it under the limit.

When the consignment exceeds £135, the facilitator rule does not apply. If the goods are outside the UK, the buyer pays import VAT and customs duty at the border (if applicable), and the seller does not charge UK VAT at the point of sale unless the goods are already in the UK. If the goods are in UK stock, the seller charges VAT in the normal way. This creates a cliff-edge: a £134 order from China triggers platform-collected VAT; a £136 order triggers border VAT and possibly a customs handling fee from the courier.

HMRC's import VAT guidance explains the interaction between the facilitator rule and traditional import VAT accounting. For sellers using Postponed VAT Accounting (PVA), the border VAT can be deferred and reclaimed on the same VAT return as input tax, but that mechanism does not apply when the platform has already collected VAT under the facilitator rule — there is no border charge to defer because the VAT was collected at sale.

Common compliance mistakes and how to avoid them

We see three recurring errors when clients first encounter the marketplace facilitator rule:

Double-counting VAT. The seller downloads their gross sales figure from the platform, multiplies by 1.2 to back out VAT, and reports that as output tax — but the platform already collected the VAT on half the transactions. The cure is to reconcile every settlement period line by line, filtering for facilitator flags, and to code only the transactions where you were the supplier.
Omitting net revenue from accounts. The opposite error: the seller excludes facilitator sales from their profit-and-loss entirely because "the platform handled it". The VAT may not touch your return, but the net proceeds are still your revenue and must be recorded. Your corporation tax or self-assessment income figure depends on it.
Ignoring overseas stock movements. If you move inventory from the UK to an EU FBA node mid-year, sales from that node become facilitator transactions going forward (assuming sub-£135 and B2C). Your VAT return profile changes without any change in customer behaviour, and you need to update your accounting model to reflect the new fulfilment geography.

The fix in every case is a single source of truth: the platform's transaction-level settlement or payment report, ingested into your accounting system with a mapping rule that distinguishes facilitator sales from direct sales. Most modern ecommerce accounting stacks (Xero or QuickBooks with an A2X or Link My Books integration) can automate this split, but you must configure the rule and verify the output every quarter. If you are handling the reconciliation manually in Excel, you need a separate tab for facilitator transactions and a clear audit trail showing why your VAT return does not match your total revenue. We cover the full settlement reconciliation process in our Shopify and multi-channel accounting guide, and the principles apply equally to Amazon, TikTok, and eBay.

How this interacts with Making Tax Digital and OSS

Making Tax Digital for VAT (MTD VAT) has been mandatory for all VAT-registered businesses since April 2022. You must file your VAT return via MTD-compatible software, and that software must pull data directly from your digital accounting records. When the marketplace facilitator rule applies, your software needs to exclude those sales from the VAT calculation but include them in your management accounts. Most bridging tools (A2X, Link My Books, Webgility) handle this automatically by posting facilitator sales to a separate nominal code and flagging them as out-of-scope for VAT. If your accountant is still using a manual VAT workbook, the facilitator split must be coded by hand every quarter, which is why we recommend full automation for any seller doing more than £10,000 a month across multiple channels.

If you also sell into the EU and use the One Stop Shop (OSS) to report EU consumer VAT, be aware that the OSS and the UK facilitator rule are separate regimes. The UK rule applies to UK-bound sales; the EU equivalent (the Import One Stop Shop, or IOSS) applies to EU-bound consignments under €150. A Chinese supplier shipping to both the UK and Germany may have Amazon collect UK VAT under the UK facilitator rule and collect EU VAT under IOSS, with the seller reporting neither. If you are a UK seller using Pan-EU FBA, you will likely need both a UK VAT registration and IOSS (or local EU registrations), and you must track which platform collected which tax. HMRC does not care about your EU VAT, but your EU member-state authorities do, and mixing the two on a single return is a fast route to a compliance notice. We explain the OSS and UK VAT interaction in detail on our VAT and Making Tax Digital landing page.

Final word

The UK marketplace facilitator VAT rule shifts compliance responsibility from seller to platform for low-value imports and overseas-fulfilled sales, but it does not eliminate your reporting obligations — it changes what you report and where. You must reconcile every settlement period, separate facilitator transactions from direct sales, and ensure your VAT return reflects only the sales where you were the supplier. The rule is stable (it has not changed since January 2021), but its application depends on stock location, consignment value, and buyer status, all of which can shift monthly as you scale fulfilment or add new channels. If you are unsure whether a batch of sales triggered the facilitator rule, or if your VAT return and revenue figures do not reconcile, book a discovery call with an SCA accountant. We will audit your last four quarters of settlement reports, map the transactions to the correct VAT treatment, and build a reconciliation model you can replicate every quarter without manual guesswork.