Calculate VAT from your Amazon selling price

Updated on May 23, 2022

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UK Accountants for Amazon FBA Sellers

When you’re a UK-based accountant working with Amazon sellers, you receive a lot of queries about VAT. With the help of their final sale price, Amazon sellers can easily determine how much VAT they should be collecting from customers.

If you’re interested in learning more about Amazon Seller VAT basics, check out this post.

Amazon VAT Problem

For eBay and Amazon sellers, a difficulty is that they only provide the final sale price to the customer when they offer their products (although this has changed slightly with the introduction of Amazon for Business and Amazon VAT calculation services).

An item advertised on Amazon for £10 cannot automatically be charged at £10 + VAT just because it is priced at £10. It’s the customer’s price that Amazon and eBay sellers may see.

Solution

Divide your final sales price by 6 to find out how much of your profit margin is truly VAT in these situations.

For instance:

To make the method easier to understand, consider the sale of a product for £10 + VAT.

VAT is added to the total, so £10 becomes £12 in total.

As a result, we can deduce that the VAT payable here is £2 (because 20% of £10 equals £2). If you sell a product for $12, how do you figure out how much VAT to charge if you don’t know how much VAT was charged in the first place?

Simple: Subtract the selling price from six times

Another example with a £12 retail price would be appropriate. It’s easy to figure out how to divide 12 by six: 2!

Since the formula (Sales Price/6 = VAT) is so easy, it should be clear to you that you can always figure out your gross sales price’s VAT amount (assuming that the VAT rate is 20%) by dividing your Amazon sales price by 6.

VAT Calculator

To see how the above works in practise, use the VAT calculator provided below.

Amazon VAT Accountants

The Amazon FBA Sellers from all over the world rely on us for their accounting needs. When it comes to VAT compliance, we can aid Amazon sellers. Use the Instant Quote option to get in contact if you are an Amazon seller and need help with VAT.