Amazon Supports UK VAT Reform, Plans to Collect Taxes for All Third-Party Sellers
Amazon is pushing the UK government to extend VAT collection rules from overseas sellers to all third-party sellers. If the policy is implemented, local UK sellers will also have VAT collected and paid by the platform, suggesting sellers review tax compliance in advance and assess the impact of platform tax collection on cash flow.
What are the key facts?
- 1Amazon supports UK VAT reform discussions
- 2Proposes to expand collection to UK local sellers
- 3Aims to eliminate dual track loopholes
- 4Expected to generate approximately £700 million in new annual tax revenue
What happened?
Amazon publicly supports the UK government’s VAT reform, suggesting the removal of the current 'dual track system,' expanding the 'deemed resale' rule to cover all local UK third-party sellers to combat false underreporting and tax evasion. Amazon stated it has collected over £6 billion in taxes since 2021, and this reform aims to further close tax loopholes.
What does this mean for cross-border sellers?
Sellers should closely monitor changes in UK VAT policy, review their tax registration status ahead of time, and ensure adequate cash flow to manage potential changes in receipt cycles due to platform tax collection.