Hey everyone, @Seller_hnDMgUKxMh1V4, @Seller_XUNeUuvrQDpgP

I’m hoping to get some advice on a VAT issue we’re having with our Amazon UK account. Our company is recognized by HMRC and Amazon as a Non-Established Taxable Person (NETP), which means we shouldn’t be charged UK VAT on services like advertising. But here’s what’s happening:

Our Situation:

Amazon has recognized our NETP status and deducted all VAT we collected from sales for the years 2021-2023 from our balance. Now, Amazon collects and remits VAT to HMRC on our behalf. However, they continue to charge us VAT on advertising services, which contradicts our NETP status.

During a tax audit, HMRC confirmed that, as a NETP (Non-Established Taxable Person), we shouldn’t be charged UK VAT on the supply of services, including advertising. Since we’re not in the UK, UK VAT shouldn’t apply to us.

We have repeatedly contacted Amazon support, requesting them to stop charging VAT on advertising services. We’ve provided Amazon with all the documentation from HMRC supporting our NETP status. Although our company is registered in the UK, we have no physical presence there other than this registration. Hence, under HMRC guidelines, we are considered a NETP. Amazon, however, insists that VAT charges are valid based on our UK marketplace address. They argue that because our business address is registered in the UK marketplace, VAT is applicable.

This creates a discrepancy: for VAT on sales, Amazon treats us as NETP, but for VAT on advertising services, they do not recognize our status.

We’re stuck and could really use some help. This situation poses a threat to our business.

Does anyone have any advice on how we can resolve this issue with Amazon? Has anyone faced a similar situation and found a successful solution?

Thanks in advance!

Hello Sellers,

According to the notification sent by Amazon a few days ago, my LTD company established in the UK stated that there will be no VAT exemption up to 85,000 GBP because it is understood as NETP (Non-Established Taxable Person).

In the 2.5 years since I started selling, Amazon has accepted my VAT exemption and has not collected VAT from sales. But now they say that this situation contains a mistake.

Now it tells them to inform them within 30 days whether I am UK established and if I am not, I will be required to pay the unpaid VAT for all sales made since January 1, 2021 and my disbursements and inventory will be blocked until it is paid.

According to this account, it is said that I have to pay back 20% VAT of my past sales to Amazon in one lump sum. (Which is A lot of money)

In addition, I have always paid 20% VAT for stock purchases I have made so far and I have not received it back.

No such warning has been made so far, and at the same time, it does not seem fair for Amazon to take such action after the e-mail stating that Amazon has accepted the VAT exemption.

If there are sellers in this situation and whose account is in danger, please meet in this forum and share their experiences.

Thanks..

90k threshold. Originally I thought I had a valid uk address to be vat free up until the threshold was reached. However, since I am using a PO Box address, I am unable to provide proof of being uk established for vat purposes (I am based in Ireland). This means I am a NETP. As a result, I have to pay HMRC the owed vat since beginning my seller journey on Amazon. My question is: will I need to provide proof of a physical address to register for Vat or will my virtual address registered with company house do?