Confused about VAT on Amazon fees - could you please help? :o)


#1

Hi, hoping someone could kindly help clarify a few things regarding VAT on Amazon fees please? I registered as a Business/Professional seller in Sept 2016 (sole trader, non-vat registered, just provided my UTR number and business name & address) and was just wondering whether the VAT I am paying on my amazon fees is correct…?

I am currently paying 15% fee on item sold price PLUS 20% VAT on the 15% fee - is this right…? I only ask as I’ve read conflicting information regarding whether or not I should be paying VAT on my Amazon Fees… Some people have said that as I am a Business and Non-VAT registered then the 20% VAT on my fees isn’t applicable and that I can claim back any VAT already paid on my fees…

Could someone please advise whether this is so…? I am very confused! (Maybe I confuse too easily lol…)

Thank you very much! :o)
Yasmyn x


#2

Hi Paul, Thank you for taking the time to reply :o) That’s what I thought but then read otherwise (on forums here and on ebay!) so thought I had better check to be sure!! Thank you so much for the clarification. I’m much less confused now. lol ;o)
Yasmyn xx


#3

You are correct. Amazon charge the standard rate of 20% VAT on the fees you pay. So, if the fee is 15%, they collect a further 3% as VAT for HMRC.

“some people” are wrong. As a sole trader not registered for VAT you are liable for this VAT element on Amazon fees.

Paul


#4

Hi

Where’s is the VAT fee stated? All of my monthly seller invoices from Amazon show 0% VAT?

Thanks!


#5

Hi, I get a monthly email sent from Amazon with a “Seller Fees VAT Invoice” attached with a breakdown of all my sales from the previous month, the amazon fees paid on them and then the 20% VAT paid on the fees…
Yasmyn x


#6

If you supply proof that you are trading as a business Amazon will stop charging you VAT on fees even if you are not VAT registered.

It’s due to legislation about cross-border B2B transactions.

Amazon will also refund the VAT back several years when they should not have been charging it.

There are numerous threads about it a couple of years ago.

Many sellers received substantial refunds.


#7

#8

If you are VAT registered and have entered your VAT number into Amazon your invoice VAT will be zeroed by Amazon as you should file them as EC services on your VAT returns. Ask your accountant for call your local HMRC office if you need help, they are really good at this stuff.

If you are not VAT registered something is wrong as your should be paying 20% VAT on seller fees. I would check into it otherwise you might find yourself in trouble somewhere down the line.

Edited by: ColThat! on May 17, 2017 11:56 AM


#9

When you declare yourself as a business you have to go through verification which includes your UTR number and other proof of business address etc.

This should be the proof you claim for Amazon to do what you say but never happened with me and not happened to anyone I know on Amazon.

They only stopped charging VAT when i went VAT registered a couple of months ago.

Can you provide evidence of this? I would certainly love to recover all the vat i’ve paid as a business seller over the years from Amazon.

As it is, you can only recover it from HMRC for 6 months as a service when you go VAT registered.


#10

#11

It seems there have been so many changes to VAT on fees on both Amazon and eBay, also along with the hear say it’s no wonder there is so much conflict in peoples responses.

I did however find this, and would hope Amazon have kept it up to date, then again you never know:
https://www.amazon.co.uk/gp/help/customer/display.html?nodeId=3517791

I would expect it is correct as this was confirmed in my VAT visit earlier this year.


#12

As I understand it, the problem here is historical.

VAT for services used to be charged at the rate of the country it was supplied FROM. Amazon (and eBay) therefore setup operations in Luxembourg which has a low VAT rate which lowered the VAT they had to charge and pay.

However, a few years ago this changed and a ruling meant you now have to charge VAT for services at the rate for the country at which the service is supplied TO.

For VAT registered traders it makes no difference (apart from a small difference as to how they reclaim the VAT on their return) as their net will be the same.

For VAT non-registered business traders it meant they should have seen a small increase in fees (from the Luxembourg VAT rate to the UK rate) but for some reason it looks like Amazon (and eBay) managed to wangle some sort of deal and effectively did not charge VAT to some businesses. I say ‘some’ as I know some people did not see any increase in fees and yet some people in the forums have said they get an invoice with VAT charged. I don’t know which to believe.

Certainly, on eBay, they have stated that as from August 1st, the contract for UK traders with eBay will be moved from eBay Europe to eBay UK and they will start to charge VAT on the fees at 20%. They go on to say that for VAT registered traders their net will remain the same, but for VAT non-registered business traders they will see an increase in fees. They then go on to say that VAT has always been charged - so I suspect that basically eBay has been footing the VAT themselves until they got all the logistics sorted out.

I suspect Amazon will go down a similar path - so yes you should be paying 15% + VAT in fees

If this has not or is not happening then do not worry about it. The onus of paying the VAT is on the business supplying the service/goods and not on the receiver (whether they a business or not).


closed #13