Founder, Aftermarket Arbitrage · 14 August 2026
The short answer
You have to register for VAT when your taxable turnover passes £90,000 in any rolling 12-month period. Not a calendar year. Not a tax year. Any 12 months, checked at the end of every month. Once you cross it, you must notify HMRC within 30 days of the end of the month you went over, and you’re registered from the first day of the second month after that.
That’s the rule. Now let me tell you where Amazon sellers actually get caught out, because I watch it happen inside my membership constantly, and it’s almost never the £90,000 number itself. It’s the two words either side of it: turnover and rolling.
Turnover means revenue, not profit
This is the one sellers get wrong more than anything else. Turnover is your total sales — what buyers paid, before Amazon’s fees, before your cost of goods, before anything. Not your profit.
Think about what that means for arbitrage. If you’re running a healthy operation at, say, 30% ROI, you might be spending £5,000 a month on stock and selling it for £8,000 or so. Your actual profit could be £1,500 a month — nobody’s quitting their job on that — but your turnover is £8,000 a month, which is £96,000 a year. Over the threshold. Plenty of sellers hit £90k turnover while making less than a part-time wage in profit, and they have no idea they’re anywhere near a VAT obligation because in their head “£90k” sounds like a big, successful business. In arbitrage it isn’t. It’s a decent side operation.
If you’re selling consistently on Amazon, work out your monthly sales figure right now and multiply by twelve. If that number is anywhere near £90,000, you need to be watching this monthly, not annually.
The rolling window is the catch
HMRC doesn’t wait for a year-end. At the end of every month, you look back at the previous 12 months of sales. If that total is over £90,000, you’ve crossed.
Here’s why that matters specifically for Amazon sellers: Q4. Almost everyone I know doubles or triples their sales in October, November and December. So a seller who’s been ticking along at £5,000 a month does £15,000 in November and £18,000 in December, and suddenly their rolling 12-month total tips over £90,000 at the end of February — the quietest, most miserable month of the year, when they’re not even thinking about VAT because sales feel slow. The Q4 spike is still sitting in the window, pushing the total over.
Check the rolling total at the end of every single month. It takes two minutes with your Amazon sales reports. The sellers who get in trouble are the ones who checked in April, thought “loads of headroom”, and didn’t look again until the following January.
What happens when you cross
The mechanics, plainly:
- You crossed £90,000 in the 12 months ending, say, 28 February.
- You must tell HMRC within 30 days of the end of that month — so by 30 March.
- You’re registered from 1 April — the first day of the second month after you crossed.
Miss the notification window and HMRC can backdate your registration and charge you the VAT you should have collected — out of your own pocket, because you can’t go back and charge your customers. Plus penalties. There’s no version of this where ignoring it works out cheaper.
The 5/6 rule: why you raise your buying bar before you cross, not after
This is the bit that actually changes how you source, and almost nobody prepares for it.
Once you’re VAT registered, a chunk of every sale belongs to HMRC. Your Amazon selling price now includes 20% VAT, which means for every £6 of price, £1 is VAT — you keep 5/6 of the sale price. And here’s the part that catches people: the £1-in-£6 comes off your revenue, not your profit. Sell at £24 and £4 of it now belongs to HMRC, so a deal that made you £6 unregistered makes you £2 registered. The hit to profit is far bigger than a sixth, which is exactly why thin deals die on registration day. A 25% ROI deal becomes something closer to breakeven-ish territory once you’ve also eaten the fees on a thinner margin. (Yes, being registered lets you reclaim input VAT, more on that in a second — but on retail-sourced stock the reclaim is messier than people assume, so the 5/6 haircut is the honest planning number.)
So here’s my rule: if your rolling turnover is heading towards £90k, raise your minimum ROI now — before you register. I don’t touch anything under 20% ROI at the best of times, and if I were six months from the threshold I’d be sourcing as if the VAT hit had already landed. The worst position to be in is a garage full of stock you bought at margins that only worked unregistered, watching those deals turn into dead money on the day your registration kicks in. Run every prospective buy through the Amazon VAT calculator at your post-registration numbers and ask: does this deal still clear my bar? If it doesn’t, it’s not a deal — it’s a deal that expires.
Pair it with the profit calculator and the FBA fee checker and you can see the full stack — fees, VAT, margin — before you spend a penny. My sourcing engine prices every lead with fees and VAT built in for exactly this reason: a number that ignores VAT isn’t a profit figure, it’s a guess.
Should you register voluntarily before you have to?
For most arbitrage sellers: no. The usual argument for early registration is reclaiming input VAT on your purchases. But if you’re doing retail arbitrage or buying from consumer-facing sites, many of your receipts aren’t proper VAT invoices, and some of what you buy is zero-rated or sold under margin schemes anyway. The reclaim you’re imagining is often smaller and messier than it looks on paper, while the 20% on your sales is real and immediate from day one.
There are exceptions — certain wholesale-heavy models, certain product mixes — which is exactly why my advice here is short: get an accountant who already works with Amazon sellers. Not a general high-street accountant who’ll learn Amazon on your invoice. One who knows what a settlement report is. The few hundred pounds a year is the cheapest insurance in this business.
What I’d do in your position
- Pull your last 12 months of Amazon sales today and see where you actually stand.
- Set a monthly reminder to check the rolling total — end of every month, no exceptions.
- If you’re within striking distance of £90k, start sourcing at post-VAT margins now. The VAT calculator exists so you can do this on every deal in seconds.
- Get an Amazon-literate accountant before you cross, not after.
VAT isn’t a reason to stay small, by the way. I’ve seen sellers deliberately throttle their sales to stay under the threshold, which is choosing to cap your business to avoid paperwork. Cross it deliberately, with margins that survive it, and it’s just another cost line — one your properly-priced deals already cover.
Where to go from here
If you’re earlier in the journey, start with my full online arbitrage UK guide — it covers the whole model from your first £500 through to the point where questions like VAT registration become real. And when you’re past the guide stage and want leads priced with VAT and fees already built in landing in front of you daily instead of hunting for them yourself, have a look at how the membership works and the pricing. The guide’s free; start there.
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. He also runs Vantage Wholesale. Meet the community on the community page or book a free call.
