Short answer: if you are VAT-registered, the 20% VAT on your Amazon ads comes back to you, provided your VAT number is in Seller Central. Without it, Amazon adds UK VAT that is not yours to reclaim from HMRC. If you are not registered and sell to consumers, the 20% is a pure cost, and registering only to get it back makes you charge 20% on every sale: for most sellers, that costs more than it saves. For a seller to businesses, registering pays.
For Amazon sellers (FBA and FBM) established in the UK, from the Amazon Advertising Agreement, Amazon Ads' help pages and HMRC's guidance, checked in October 2026. This is information, not tax advice: confirm your case with your accountant.
Work out your case with our free calculator
Who bills your ads, and what VAT they add
One Amazon company per marketplace. The Amazon Advertising Agreement names the "Amazon Contracting Party" for each country your ads run in (Amazon Advertising Agreement, posted 23 July 2026):
| Your ads on | Billed by | VAT on the invoice |
|---|---|---|
| amazon.co.uk | Amazon Online UK Limited | 20%, always |
| amazon.com | Amazon.com Services LLC | None with your number |
| amazon.de, .fr, .it, .es | That country's Amazon company | None with your number |
- amazon.co.uk is a UK supply. Amazon Online UK Limited charges 20% UK VAT to every UK advertiser. Registered, you reclaim it on your VAT return like any other UK purchase.
- Ads billed from abroad carry no VAT when Amazon has your number. You account for it yourself under the reverse charge: the same amount goes in as VAT due and as VAT reclaimed, on the same return. Net cost: zero. HMRC: the reverse charge "applies if your supplier belongs outside the UK even if they have a UK VAT registration number" (VAT Notice 741A, section 5).
- Without your number, Amazon adds your country's VAT. Amazon's tax guide: it "may be required to collect the standard rate of VAT/GST applicable to your country of residence or business establishment when a VAT/GST ID isn't provided" (Amazon Ads tax guide).
You are VAT-registered: is your number in Seller Central?
A seller enters the number in Seller Central, not in the advertising console (Register your Tax ID):
- In Seller Central, open Account Info.
- Choose VAT Information, then Add new VAT/GST Registration number.
- Enter your UK VAT number, the one that matches your business address.
What a missing number costs on ads billed from abroad: 20% too much, for nothing.
| Ads from abroad per month | Too much per month | Per year |
|---|---|---|
| £1,000 | £200 | £2,400 |
| £3,000 | £600 | £7,200 |
| £10,000 | £2,000 | £24,000 |
Get it back from Amazon, not on your return. HMRC: "If you think you've been wrongly charged an amount as VAT by your supplier, this is a commercial matter. You should seek a refund from your supplier" (VAT Notice 700/45, section 5.2). Amazon refunds when you send your number and proof that your registration was "active during the billing period", through the "Contact us" link; allow 30 days (Tax refunds). Amazon publishes no deadline: ask now, then account for the reverse charge on those invoices.
amazon.co.uk VAT you forgot to reclaim: it is ordinary input tax. Claim it on a later return, "within the 4-year time limit" (VAT Notice 700/45, section 6.1).
Not registered, under £90,000: what registering really costs
Below £90,000 of taxable turnover over 12 months, you do not have to register, but you can. GOV.UK: "You can choose to register for VAT if your turnover is less than £90,000 ('voluntary registration')" (Register for VAT).
Registered, you reclaim the 20% on your ads, and you charge 20% on every sale. Amazon does not take that VAT off your hands: the marketplace accounts for VAT only on sales "by a seller not established in the UK" (HMRC, online marketplaces). Established in the UK, you charge it yourself. A consumer cannot reclaim it, and on Amazon your price is the market price: the VAT comes out of your margin.
Example: you sell to consumers, £8,000 of sales a month, prices unchanged. You buy £3,000 of stock (plus £600 VAT) and £1,500 of ads on amazon.co.uk (plus £300 VAT).
| Per month | Not registered | Registered |
|---|---|---|
| Sales received | £8,000 | £8,000, of which £1,333 VAT to pay |
| Stock | £3,600 | £3,000 (VAT reclaimed) |
| Ads | £1,800 | £1,500 (VAT reclaimed) |
| What is left | £2,600 | £2,167 |
Registering costs you about £433 a month, £5,200 a year. You would also reclaim the VAT on Amazon's fees and your other costs: that narrows the loss without closing it at this margin. For a seller to consumers, registering pays only when the VAT on your costs is larger than the VAT on your sales. That happens when your goods are zero-rated, "for example, most food and children's clothes" (VAT rates): you charge 0% and reclaim the 20% on your ads.
If you register anyway:
- Not on the Flat Rate Scheme. With it, "you cannot reclaim the VAT on your purchases", ads included (VAT Flat Rate Scheme).
- The past barely comes back. VAT on services received "not more than 6 months" before your registration date can be reclaimed, and on goods "up to 4 years" before if you still hold them. A voluntary registration can be backdated "by up to 4 years", but then you owe VAT on every sale since that date, and the date "will not normally" be changed (VAT Notice 700/1).
- You can leave. You may cancel when your taxable turnover over the next 12 months will not exceed £88,000, the cancellation limit, but never retrospectively (VAT Notice 700/11 supplement).
You sell to businesses: registering pays
A VAT-registered customer reclaims the VAT you charge, so you add 20% to your price without losing a penny of it, and the 20% on your ads comes back to you.
The same seller, selling £8,000 a month (excluding VAT) to businesses: £3,500 left registered instead of £2,600, so £900 a month more. In the calculator, choose "Seller to businesses (B2B)".
Ads billed from abroad count toward your £90,000
The value of ads you buy from Amazon companies outside the UK is added to your own sales to decide whether you must register. HMRC: it "must be added to the value of your own taxable supplies", and "even if you make no taxable supplies yourself, you may still be required to register" (VAT Notice 741A, section 5.7). Ads on amazon.co.uk, billed by a UK company, do not count.
£70,000 of sales and £2,000 a month of ads on amazon.com make £94,000: above the threshold, registration is no longer a choice.
The 2% that is not VAT
For ads served in the UK, Amazon can add a Regulatory Advertising Fee of up to 2%, following the UK's Digital Services Tax. Amazon adds these fees "to your invoice subtotal" (Regulatory Advertising Fees, updated 22 July 2026). It is a fee, not VAT: registered or not, no VAT return gives it back.
Frequently asked questions
Do I enter my VAT number in the Amazon Ads console?
No. Amazon Ads' help sends sellers to Seller Central: Account Info, then VAT Information. The console's own Tax info field is for vendors and KDP authors.
Will Amazon refund the VAT it added before I gave my number?
Yes, for invoices from a period when your registration was already active, with proof of it, according to Amazon Ads' "Tax refunds" page. Before your registration date, nothing is refunded.
I sell on Amazon from abroad. Does this article apply?
No. Sellers not established in the UK follow other rules: the marketplace accounts for the VAT on many of their UK sales.
Before you decide
Work out your case with our free calculator: choose "FBA & FBM seller, to consumers" or "Seller to businesses (B2B)", enter your monthly ad spend, and take the figure to your accountant.
Whatever your VAT status, the cheapest pound is the one you do not waste on clicks that never sell: see how Amazon negative keywords work and how much Sponsored Products ads cost. Publishing books too? UK KDP authors and VAT on Amazon ads follows other rules.
Sources
- Amazon Advertising Agreement (posted 23 July 2026, "Amazon Contracting Party"), Amazon Ads
- Complete guide to advertising taxes, fees, and VAT on goods sold, Amazon Ads
- Register your Tax ID (24 February 2026), Tax refunds (3 September 2025) and Regulatory Advertising Fees (22 July 2026), Amazon Ads help
- VAT rates, GOV.UK
- Register for VAT (threshold, voluntary registration), GOV.UK
- VAT Notice 700/1: should I be registered for VAT? (backdating, pre-registration VAT), HMRC
- VAT Notice 700/45: how to correct VAT errors, sections 5.2 and 6.1, HMRC
- VAT Notice 700/11 supplement (cancellation limit), HMRC
- VAT Notice 741A: place of supply of services, sections 5 and 5.7, HMRC
- VAT and overseas goods sold to customers in the UK using online marketplaces, HMRC
- VAT Flat Rate Scheme, GOV.UK
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