Why is there 0 VAT to pay on all my seller fees
Hi Guys,
I imagine that this may have been asked before, however im still struggling to get my head around Amazons seller Fees and the applicable VAT.
I get monthly emails from Amazon saying my VAT invoice is ready to view (we are a VAT registered business, based in the UK). However, when i go to Reports –> Tax Document Library -> Seller Fee Invoices (tab) there is never any VAT being charged, why is this?
The always useful seller support answer is that Amazon dont charge VAT on B2B transactions, which is what Amazon considers this to be, and as a result are not charging us VAT. Which again makes zero sense, becuase whenever we deal with other businesses in our usual course of business we always charge VAT to them on invoices, so why is Amazon unique from this requirement?
Im asking because we need to include VAT on seller fees in our quarterly VAT returns
Seller_7VbclcPFFRTnc
You should be able to just use the summary function then in date range reports
Income box is net and tax box bottom right is vat on sales
Expenses invoices are in tax document library. All bar advertising should be 0% rated.
Advertising is 20% which can be claimed back
21 replies
Seller_qZO3ZCjoBXEeL
Because you are VAT registered the VAT on the Amazon invoices is reverse-charged (it says that at the bottom of the invoice - saying you are responsible for the VAT).
I forget the specifics but you essentially account of it as both input and output so net zero to pay.
Seller_7VbclcPFFRTnc
Hopefully you have an accountant who is correctly processing the reverse charge on your vat returns?!
Seller_VJFloi7Cs0iaR
This is one of the main reasons prices are going through the floor on a lot of popular products, relatively new sellers not completely understanding the economics of selling on Amazon therefore pricing too low, assuming they can claim back VAT that they haven’t paid, thus destroying any margin they thought they had when the VAT bill comes in.
Seller_tRuvBEHDedp4q
Basically because Amazon are based outside the UK, then the service they provide the VAT is reverse charged.
If Amazon were based in the UK, you would see the VAT added as normal to claim back.
You do have to account for the VAT as if it were paid though on your VAT return
So, for example, If total Amazon fees were £100 in the quarter, VAT on this would be £20
I cannot remember the exact box numbers you enter this into but you add that £20 to 2 boxes - 1 for VAT paid, the other for VAT claimed - so in effect they cancel each other out. This is the reverse charge mechanism.
