Ongoing VAT Issue with Amazon UK - Seeking Assistance

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Seller_OeWMj3c2eoJZm

Ongoing VAT Issue with Amazon UK - Seeking Assistance

Hello fellow sellers,

We’ve been facing a significant issue with VAT charges on Amazon UK for the past two years, and we’re hoping to get some insights or advice from this community. Despite our persistent efforts to resolve the problem, it seems Amazon support is not addressing the issue effectively.

Since we started selling on Amazon UK, our products have been incorrectly charged 20% VAT. According to both Amazon’s own guidelines and HMRC regulations, our products should be zero-rated for VAT. However, we continue to face this issue across multiple listings.

Every product we list gets a 20% VAT applied, despite qualifying for zero VAT according to UK tax laws. This incorrect VAT charge has significantly affected our pricing strategy and profitability, as we are unable to pass these unnecessary costs onto our customers. We've contacted Amazon Seller Support numerous times, providing detailed explanations and references to relevant HMRC guidelines, but the issue remains unresolved.

Amazon's guidelines state that sellers are responsible for ensuring that the correct VAT rate is applied to their products. Amazon provides functionality for setting VAT rates, but it seems there might be a systemic issue preventing correct application in our case. According to HMRC, certain products are zero-rated for VAT purposes. For instance, “food items for human consumption” generally fall under this category unless they are considered confectionery, alcoholic beverages, or other specific exceptions. Our tax advisors have confirmed that our products should indeed be zero-rated, aligning with both HMRC guidelines and standard industry practices.

We’ve submitted extensive documentation and references to Amazon support, highlighting the applicable HMRC regulations that justify our products being zero-rated. Despite our efforts, the response has been slow and largely unhelpful, often resulting in generic replies without any substantive progress.

We are reaching out to the community for advice. Has anyone else faced similar issues with VAT misapplication on Amazon UK? How did you resolve it? Are there any effective ways to escalate this issue within Amazon to get a more responsive and informed resolution? Would it be advisable to engage a legal professional or a specific consultant who has successfully navigated such issues with Amazon?

Any help, insights, or suggestions from the community would be greatly appreciated.

Thank you for your time and assistance!

Best regards,

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Sakura_Amazon_

Hello @Seller_OeWMj3c2eoJZm,

This is Sakura from Amazon. Welcome to the Seller Forums.

Could you share the case ID that you opened with Seller Support ?

Regards,

Sakura

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Seller_Dn6cNUulke5cm

Hello I'm facing a similar issue. When Amazon started handling VAT on my behalf, it disregarded the VAT category I assigned to each product. Consequently, it erroneously applied VAT to items that should have been exempt (0% VAT). I noticed this mistake two months later after Amazon had mistakenly collected over 10,000 pounds in VAT on these products. Despite numerous attempts, I only managed to recover a portion of the VAT after Amazon reassessed the situation. However, for the majority, Amazon's response was that these items were subject to the standard VAT rate, often without any clear explanation or, if provided, the explanation was brief and substantially incorrect. My detailed queries have repeatedly been ignored or unanswered.

This situation is particularly frustrating for three main reasons:

1. Amazon acknowledges that some products qualify for 0% VAT, which are essentially the same as others they tax, differing only in flavor variations.

2. Most troubling is that Amazon itself sells one of these products directly and does not charge VAT, yet it collected VAT from me on the identical asin.

3.The amount is significant relative to our business size.

I don't understand why for some products Amazon understood the situation and corrected the mistake and others didn't. And even if I tried to redo cases for the same product, they don't check again, they just copy the old answers they gave me. But the only thing that helped was to insist on this topic.

Did you manage to get results?

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