VAT and Deferred Transactions on Amazon: A Cash Flow Concern
Hello!
I have written several times asking to postpone my DD7 scheme but received no reply @Julia_Amazonplease help
As Amazon sellers, managing VAT can be tricky, especially when it comes to deferred transactions. Recently, I noticed that Amazon charges VAT immediately when a sale occurs, even if the funds are held for more than 10 days.
For example, a transaction made on September 30th might not release funds until October 10th, but the VAT is charged on September 30th according to VAT transaction report. This creates a cash flow issue—how are we supposed to pay VAT when the funds haven't been received?
This lack of synchronization between VAT charges and fund availability puts sellers in a difficult spot. We need Amazon to align these processes to make VAT obligations fair and manageable.
10 replies
Seller_ZVAz3d5lZuGid
As per another thread, it may be that if you did not receive the email offering you the option to postpone the DD+7 that you may not be able to. It was posted By @Julia_Amazon
Dear Sellers,
UPDATE: THE FOLLOWING COMMUNICATION IS ONLY FOR SELLERS WHO RECEIVED THE EMAIL WITH AN EXTENSION PROPOSITION BUT HAVE NOT RECEIVED A RESPONSE TO THEIR REQUEST.
If you need to extend the DD7 policy exclusion until September 2025 for your Amazon seller account, please follow these steps:
1. Send an email request from your Amazon email address to eu-uk-reserve-policy-extension@amazon.co.uk
2. In the email, make sure to include your Merchant token. Your Merchant token is a unique identifier for your seller account, and it's essential to include it in the email for proper identification and processing of your request.
3. Once you've sent the email with your Merchant token, Amazon will review your request and provide further instructions or assistance as needed.
If you have any further questions or need assistance, please feel free to comment this post.
Thank you,
Julia
Seller_d8YGbIjNqwFxn
The VAT is correct it is charged at the point of sale. Which in Amazon world is the point of despatch.
Are Amazon collecting VAT on your behalf? This is the only time it would cause a problem. If you are paying VAT by a quarterly VAT return it wouldn't cause you any problems .
The only option is to try contacting the email address again to ask for a postpoment. Did you send it from your registered Amazon email address? I would also include the merchant ID as well.
Seller_mS10UjVYuuGor
VAT is VAT
It's not for Amazon to align VAT payment with disbursements, they have no control over VAT which becomes due at the point of sale and due to HMRC. VAT is HMRC, disbursements are Amazon, they are unconnected.
If you're UK based and filing quarterly returns you'll have the disbursements before the payment is due. If you're not UK based and Amazon are collecting for HMRC you potentially have to front a bit while you wait for a disbursement to be available.
Roberto_Amazon
Hello! @Seller_wc3hEgm0kJ23u
This is Roberto. Thank you for using the Forums.
I understand you have written several times to postpone the DD+7 policy change. As noted by @Seller_ZVAz3d5lZuGid, if you were not originally notified with an offer to postpone the exclusion, it means you may not be eligible.
We have confirmed that since you registered your Selling Account, you have been subject to DD+7 reserve. Our team currently handling the exclusion requests are receiving numerous requests; however, many of those of requests are not eligible to postpone the DD+7, this increases the response time to eligible sellers.
Thank you for your understanding,
Roberto
Seller_DfMOm9tgJKAex
legally vat is charged at point of sale..
now this is an issue most business owners have to deal with.. even brick and mortar shops when credit card machines only remit every 7 or 10 days!!
one thing you also miss, is that VAT is paid every 3 months... and when vat is taken by HMRC for the period say. June/July/aug the payment is taken on 7th oct -- so this isn't a valid reason to differ dd7 as the vat is paid much AFTER you've been paid
