VAT Related Question from those who have been paying VAT
Dear Sellers
I have registered vat recently and suppose to paying vat every 3 months. My question is when you pay vat do you pay according to amazon settlements periods or pay according to sales for example between 1/01/2025 to 31/03/25?
As amazon Settlement periods are different from Monthly sales. They don't match at all.
Thanks in Advance
13 replies
Seller_k2X0L9mVRT0pW
you pay the Vat element on total sales including postage, not on Amazon settlements.
Seller_d8YGbIjNqwFxn
It should be based on the date of despatch which is the date that Amazon raise the invoice (assuming you are using Vat Calculation Sales).
Use the reports under Payments->Report Repository to get the sales for a period. You can choose a detail or summary report.
Seller_mS10UjVYuuGor
If you're registered for quarterly returns you need to work to HMRC dates.
The important dates are one month and seven days after the end of the VAT quarter by which time you'll need to have submitted your return and made payment i.e. by 7 May / 7 August / 7 October / 7 February respectively. If you set up a Direct Debit for payment you still need to get your return submitted by those dates but HMRC will collect payment a couple of days after the 7th and you won't incur late payment fees.
The returns have to be submitted digitally i.e. through accounting software such as Xero or QuickBooks. It is highly advisable to have an accountant make up and submit the return for you or at least to have an accountant look over the return before subitting it.
Seller_QZwjchok4Nxyp
Hi, if I've understood your question correctly then it depends on whether you use cash or accrual basis accounting. Cash basis accounting: when you pay or receive money. Accrual basis accounting: records income and expenses when a purchase or sale is agreed. Also, we use Link My Books to automate our bookkeeping for our selling platforms, including Amazon. It saves us hours.
Seller_DfMOm9tgJKAex
the periods are in whole months. ie, Jan/Feb/March. based on you WHOLE sales value, and you claimable expenses
Seller_IC5dxZRZpcM4T
Hi,
As an accountant, I would recommend you lookup the HMRC instructions on 'VATTOS4100 - Basic tax points: introduction'
As Quality_Online has mentioned, it will depend on what method of accounting you have agreed with the HMRC to work on, Quality_Online has highlighted the two usual methods,
1 Cash Accounting - based on the date funds are received and paid
2 Accrual Accounting - based on the tax point (Date)
unfortunately the tax point rules are not as clear as they would appear, i.e. they aren't always based on the shipment date, but these are usually the tax point, other factors can cause a tax point to be created which doesn't match the shipping date or the payment date.
Amazons reporting doesn't lend well to identifying the tax point and their reports are a nightmare, and I know what i am doing, i reconcile the disbursements to the invoices each month to ensure they match, its not that i dont trust Amazon to get it right, but...!
If in doubt, you should discuss with your accountant which invoices you can use for reporting information to the HMRC, as the tax is your responsibility to get right, no matter what Amazon tell you. The Tax documents are normally held in the tax library but often they are late so dont be surprised if the dates dont correlate with the expected monthly dates.
All the Best.
