Amazon Forced to Pay your Tax
- Arnold Shields
- Apr 15, 2016
- 3 min read
Updated: May 23
The UK Government has dropped a bombshell in its latest Budget—Amazon and other online marketplaces can now be held liable for VAT evasion by overseas sellers. This is a wake-up call for international Amazon.co.uk sellers, and failing to act now could see your account suspended, your funds frozen, and your UK revenue stream cut off.
New HMRC Powers and What They Mean for You
According to the Budget Papers:
“HMRC will be able to require non-compliant overseas traders to appoint a tax representative in the UK… If traders continue to evade VAT and no action is taken to prevent the fraud, then online marketplaces can be made liable for the VAT.”
Amazon will not take this lightly. With an estimated £500 million lost annually to VAT evasion by overseas sellers, Amazon is under pressure to act. Expect drastic enforcement measures—quickly.
How Amazon Might Respond
Amazon has several likely options:
Account suspension for sellers who fail to prove VAT registration and compliance.
Withholding payments until you show you’ve registered for VAT, paid your dues, and have a UK VAT agent.
Total bans for persistent non-compliance.
This is consistent with how Amazon has handled IP disputes and policy breaches in the past.
The Cost of Doing Nothing
If Amazon blocks your account:
Your sales stop instantly.
You lose cash flow.
Your stock sits idle in UK warehouses.
You face lengthy delays to reactivate your account—if you can at all.
But Here’s the Silver Lining
This crackdown is a golden opportunity. While others panic, you can get ahead.
With fewer sellers online, less competition means more visibility and more sales—many of our clients are already leveraging this to boost their UK and EU rankings.
Europe’s eCommerce market is massive—508 million consumers. Compared to the US, it’s relatively underdeveloped. Now’s the time to gain market share.
VAT Registration is Not Optional for You
Many sellers mistakenly believe they only need to register for VAT once they exceed £83,000 in sales. This is false for overseas businesses.
As an overseas-based seller:
There is no threshold.
You must register from the first pound of sales.
You must lodge quarterly VAT returns.
You Might Not Need to Pay 20%
The standard VAT rate is 20%, but not everyone has to pay that:
Reduced rates (e.g. 7.5%) apply to certain products and schemes.
We assess your eligibility and apply the most tax-efficient option.
How We Can Help
We are Registered VAT Agents with HMRC and offer a complete service:
✅ VAT Registration – we handle all the paperwork and get you into the right scheme from the start.
✅ Representation – HMRC deals with us first, and we speak the language.
✅ Quarterly VAT Lodgements – we prepare and file your returns, ensuring accuracy and minimising overpayment.
✅ Ongoing Support – if HMRC ever has questions, we’re the ones on the phone, not you.
Don’t Risk Your Account. Act Now.
Get ahead of the crackdown. Beat your competitors to compliance and grow while they scramble.
📞 Call us on 02 9411 5422 or contact us for a no-obligation chat.
P.S. – We understand Amazon sellers. Let us show you exactly how we can help you thrive in the UK and Europe.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
