Starting 1 August 2024, Amazon will begin charging VAT at 20% on selling fees for UK vendors. This change results from a shift in the legal entity responsible for charging these fees. Previously, fees were billed by Amazon Services Europe S.a.r.l (ASE), which didn’t have a UK establishment, making the fees subject to the VAT reverse charge procedure. However, from 1 August, fees will be charged by Amazon EU S.a.r.l (AEU), which has a UK branch. Consequently, AEU is required to apply VAT at 20% to these fees.

VAT-registered vendors can reclaim the VAT, following the usual partial exemption rules. However, non-VAT-registered vendors will face a 20% increase in selling fees, as they cannot recover the VAT.

Typically, such VAT increases are passed on to consumers, as vendors adjust their pricing to account for the higher costs.

For more details, see: https://sellercentral.amazon.co.uk/seller-forums/discussions/t/fe8e800e-d95c-42ae-a98b-e6e682547f90