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 is 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.
Every deal you have already checked needs checking again. After registration your profit on each one is 5/6 of what it was. Fine for one product. A sourcing session is fifty. SellerAmp SAS has a VAT setting, so the profit and ROI it shows while you browse are already the registered numbers. I have my members use it. Start on the 14-day free trial and enter code AMAVIP: 50% off your first month. AMAVIP_ANNUAL: 5% off annual.
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.
