Our first Company on Amazon - VAT - less than £80K Sole Proprietorship
Hi guys,
Happy new year to you all.
I am just trying to start my entrepreneur business on Amazon UK (UK Bases) and I was wondering if someone could help me with the following point:
I am a bit confused regarding the VAT registration required by Amazon( UTR number). I registered myself as Sole Proprietorship, however, I am not going to sell more than £80K per rolling year for sure.
Can I start selling without a VAT URT number? what should I do in this situation? Can I have future TAX problems?
Any help will be much appreciated
Seller_jjpuxj3CfNljt
I think the confusion in your question comes from the misunderstanding of tax. there is not only one form of tax (VAT is just a sales tax). theres income tax on salaries, corporation tax on profits as well as a sales tax (VAT). I strongly recommend not registering for VAT due to the huge benefit of extra profit for you in the growing stage, you can sell under 80k a year and make a live-able income from it and if thats the situation you find yourself in you want as much of the profit for the business and not the tax man, the reason the government give this allowance is so small businesses have the best possible opportunity to grow, it’s the best tax allowance in the world actually (85k) so make use of that! its a valuable asset.
UTR is only for correspondances and registrations with HMRC, Amazon will never need this. they will need your Vat Reg Number after you complete registration.
best of luck!
19 replies
Seller_taDBgt7LctucW
VAT and UTR numbers are two different things. Your UTR (Unique Tax Reference) is given to you by HMRC when you inform them that you are self-employed. It is a good idea to have this in place before you start selling.
Seller_DROodOAYHftnc
Just to confirm what previous reply says - you need to register with HMRC as self-employed (can be done online), and they will give you your UTR (Unique Tax Reference). You will need that to be verified to sell on Amazon as a Business Seller.
You do not need to register for VAT until your turnover reaches £85K, though some sellers choose to even below the threshold.
Seller_PUgTge8LPB8FY
It might be worth considering registering for VAT from the start. Of course, you would have to charge VAT to customers and pass it on to HMRC every quarter, but you can reclaim VAT on many business expenses/costs. It would also mean that, when the happy day arrives on which you have to register (£80K), you won’t have to wait around while Amazon tries to get its collective head around your sudden change of circumstances - which can be a disruptive process. Finally, if you can build a successful pricing strategy that includes VAT, your customer base won’t be put off further down the line, when you have to add VAT to your prices.
Seller_7VbclcPFFRTnc
Are you a UK Citizen living in UK or are you based abroad and selling via Amazon FBA ?
If you are based abroad and selling via FBA then you will need to register for VAT with HMRC regardless of annual turnover
Seller_vWOZzBGhnkxzM
Please do not register for VAT until it’s necessary. Any accountant will advise you that. Please get professional help with tax.
Seller_L3E8iknKXqZNV
Are you based in the UK? Or selling visa FBA with UK base stock from overseas.
if so - you will need to register for vat regardless of your turnover - or you will soon find amazon blocking your account.
if
Seller_jjpuxj3CfNljt
I think the confusion in your question comes from the misunderstanding of tax. there is not only one form of tax (VAT is just a sales tax). theres income tax on salaries, corporation tax on profits as well as a sales tax (VAT). I strongly recommend not registering for VAT due to the huge benefit of extra profit for you in the growing stage, you can sell under 80k a year and make a live-able income from it and if thats the situation you find yourself in you want as much of the profit for the business and not the tax man, the reason the government give this allowance is so small businesses have the best possible opportunity to grow, it’s the best tax allowance in the world actually (85k) so make use of that! its a valuable asset.
UTR is only for correspondances and registrations with HMRC, Amazon will never need this. they will need your Vat Reg Number after you complete registration.
best of luck!
Seller_uSBqWAlkccs2f
Why not just go onto HMRC’s website and ‘starting a business’ sources and read up on everything you need to know to start a business in Britain. Because if you don’t know this one (rather significant) thing, you are probably going to not know all sorts of other stuff. I don’t think asking incrementally on a forum is really the best way to get a thorough understanding of the system and your responsibilities and options.
