If you are a sole trader or an Amazon seller and sell goods to customers in the UK, you may encounter value-added tax (VAT) issues.
When your company is registered for VAT, you may overlook some goods that qualify for a 0% VAT rate.
As different countries and regions have different regulations, there are some details that you need to pay extra attention to when selling goods.
VAT in Different Countries
With the continuous development of international trade, EU countries and the UK have developed detailed tax laws.
For example, in the UK, the current standard VAT rate is 20%, When a business’s annual turnover exceeds £85,000, it is mandatory to register for VAT.
Other European countries have different rates, such as the Czech Republic’s standard VAT rate of 21%.
Germany’s standard VAT rate is 19%, and Italy’s standard VAT rate is 22%.
If you want to learn about VAT in other countries, you can contact our professional team for the latest information.
Goods That Qualify for 0% VAT
Firstly, to qualify for 0% VAT, the delivery address must be within the UK.
Secondly, some goods have specific requirements that need special attention.
Food:
If you are running a store or an online shop, you may need to pay attention to the VAT on the following foods:
- Basic foods (meat, fish, vegetables, and fruits, etc.).
- Unroasted and unsalted nuts and beans (if not shelled).
- Plain biscuits (e.g., uncovered chocolate).
- Canned and frozen food (excluding ice cream and similar candies).
- Bread and bread products (e.g., bread rolls, pita bread, naan bread)
Books:
Printed books, digital newspapers, Kindle e-books, and subscription magazines are eligible for 0% VAT.
Some special non-printed books are taxed at the standard VAT rate of 20%, such as audiobooks.
Children's shoes or baby clothing:
Generally, children’s shoes, including boots, sandals, and slippers, qualify for a 0% VAT rate.
In addition, most baby clothes also qualify for 0% VAT, such as bibs, disposable or reusable diapers.
Baby blankets, sleepwear with lining, and towel robes also meet this condition.
As baby products are carefully classified, we recommend that you contact HMRC for further assistance if you are unsure.
These categories also apply to Amazon sellers.
If you have not registered for VAT or want to learn about VAT-related content, feel free to contact our accounting team, we are partners of Amazon VAT.
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