Founder, Aftermarket Arbitrage
Two VAT questions decide more Amazon UK profit than any sourcing trick: how close are you to the £90,000 registration threshold, and what does registering actually do to your margins? I’ve watched sellers get both wrong. Work out yours below.
How close am I to the VAT threshold?
You must register when your taxable turnover for the last rolling 12 months passes £90,000 – it’s not a calendar-year figure, which is the bit that catches people out.
What does registering do to my profit?
Here’s the rule almost nobody states plainly: for a typical arbitrage deal, your VAT-registered profit is exactly 5/6 of your unregistered profit. You hand a slice of the same trade to HMRC – you pay VAT on your sale, reclaim it on your buy and your fees, and the algebra lands on 5/6 every time. My sourcing engine prices every deal both ways on exactly that basis.
General guidance, not tax advice – the threshold and the mechanics are on GOV.UK, and an accountant who knows Amazon sellers is worth every penny once you’re near the line.
The full economics – fees, VAT both ways, and the costs sellers forget – are walked through in my Online Arbitrage UK guide.
About the author
Jack Bayliss is the founder of Aftermarket Arbitrage, where a team and a purpose-built sourcing engine find and verify Amazon UK deals for members every day. Meet the community on the community page or book a free call.
