Does Amazon pay VAT to Gov on my behalf?
Hi guys
I am just trying to understand how VAT works on Amazon UK, any help is very much apreciated.
Obviously I need to pay the Government 20% VAT on whatever my sales value is…
BUT…
Does Amazon take 20% of my sale and transfer to the Government on my behalf… and then transfers to me what is left…
or do I need to pay the 20% to the Government myself? and Amazon does not take this amount alongside their own fees.
?
Seller_7VbclcPFFRTnc
You sell item on amazon for £10
Amazon take away selling fees (% dependent on category) lets say 15.3% - no vat cause you are vat registered - £1.53 - this is NOT vat to the government - this is amazon commission
They transfer what is left - £8.47
You pay government vat on your turnover minus vat on any costs incurred ie product itself, postage etc
63 replies
Seller_EOmLRMFX8Oo9x
No Amazon takes the VAT from your Fees
Yes you are responsible for filing and paying your own VAT
Seller_EOmLRMFX8Oo9x
Are you above the 85k turnover threshold?
Seller_gOzZ4ehojzaW0
I was afraid that I was paying VAT twice… in such a way that…
For example sell an item on Amazon for £10 total.
Amazon automatically send Government 20% so £2
then Amazon transfers me what is left (£8) minus Amazon fees(-£1)
So I get £7
Then I pay 20% VAT of £7 which is £1.40 to Government.
But now I understand this is not the case… right?
Seller_gOzZ4ehojzaW0
Sorry I made a mistake in when I first typed this out… what I was afraid was happening is that I was paying VAT twice by mistake…
in that…
For example sell an item on Amazon for £10 total.
Amazon automatically sends Government 20% of 10 so £2
then Amazon transfers me what is left (£8) minus Amazon fees(-£1)
So I get £7
Then I pay 20% VAT of £10 which is £2 to Government also.
But now I understand this is not the case… thankfully!
I do understand correctly now right?
Seller_gOzZ4ehojzaW0
@Tomahawk_Sports and @The_Little_Shop
Thank you very much for this information, seems I have been paying to much VAT for about 5 years then
Seller_3u63TG7fpfnG6
if you pay a flat rate it’s not 20% works for people who sell low-cost items
you need an accountant
Seller_m9RhzR125MeSt
Here is How it works.
Lets say You bought an item for 4.80. Which was £4.00 plus 0.80 VAT. You Sell that item on Amazon for lets say £14.00. Now Amazon charges you fees of that sale suppose £3 and you get £11 from Amazon.
If you are VAT registered then you can claim back that £0.80 VAT which you paid while you purchased the item for the purpose of selling. Then you can claim back £0.60 from Amazon which is the VAT you paid to Amazon in that £3 Amazon selling fee. As you made profit of 11.00 - 4.80 = £5.20. You will pay the Government 16.66 % of the profit you made so the VAT will be £0.87. As you already claimed back £0.80 from the Government for the VAT you paid on Purchase and You have got £0.60 back from Amazon as well, so you will be better off in this situation if you are VAT registered. I hope this make sense.
Seller_uSleh6nhjpyx5
if you are FBA then Amazon is collecting VAT
Marketplace Facilitator Order: Amazon is collecting VAT on this transaction.
This is a marketplace facilitator order and hence tax is being collected and remitted to the tax authorities by Amazon. Your net proceeds will not include VAT for Marketplace Facilitator order. Please visit
Seller_QuOnfVPGqdVsh
HI , Yes , Amazon do collect VAT on sales on behalf of HMRC if you are based out of UK as new regulations since Jan. 2021 . Hope it will help - And also check if there is any message with order details like that
This is a marketplace facilitator order and hence tax is being collected and remitted to the tax authorities by Amazon. Your net proceeds will not include VAT for Marketplace Facilitator order. Please visit Tax Regulations - help page for additional information.
Hope it help too . Regards
Seller_RIenAvmD7eO9D
You might want to consider Flat Rate Vat. You simply pay HMRC 7.5% (6.5% in the first 12 months) of your sales value. No need to claim vat or pay vat at 20%. So if you sell £100, you ignore all fees and cost of goods etc, you simply pay £7.50 to HMRC
