Tax for new seller
Hi,
Hope you can help. I am a new seller and get charge tax on my profit I get from selling on each item (my net income come after tax) but my income is below the threshold of £85k. Can you please advise why is that as I believe I should not be paying taxes if my income hasn’t reached the threshold?
Kind regards
0 replies
Seller_DROodOAYHftnc
The 85k is the threshold for VAT, not standard income tax.
Of course you have to pay taxes, just like everyone, if your income is above the personal allowance.
Maybe check out the HMRC government website - tells you all about being self-employed, what you have to declare and what you can claim for as business expenses etc. etc.
Seller_64jziShTiTjOq
Who is charging this tax? If it’s Amazon, it’s not a tax on your profit, but VAT on their fees, which you have to pay, even if your income is below £85,000. If it’s HMRC, then as @JillyB1 has said, you have to pay income tax on your profit, the same as everyone else
Seller_qZO3ZCjoBXEeL
85k is the threshold before a UK based seller must charge VAT on items they sell.
You are charged VAT on everything you purchase (goods and services) regardless of your turnover.
So yes, you will see VAT being charged by Amazon on everything they charge you in fees.
This is just a tax payable on the goods and services you purchase, it has nothing to do with your sales to customers and taxation on them.
If you are not a UK based seller you may well also be seeing that Amazon are withholding/deducting the 20% VAT on each of your sales in accordance with the online marketplace VAT rules. Are you a UK trader/business who is also personally resident in the UK?
Seller_7VbclcPFFRTnc
I would strongly advise speaking with an accountant ASAP as if you are not accounting for vat on your purchases , your profits may be much lower than expected, if any, and therefore may radically affect your business
