Reverse VAT with A2X
A question to anyone using A2X to import their invoices into their accounting software, in our case Xero. We’ve spotted an issue that’s come up and A2X support have advised they’ve never seen it before but I don’t see how that it possible unless we’ve done something very wrong. So the issue relates to Reverse VAT. When A2X send you an invoice with each payment from Amazon it has a long list of money received and money spent. On this list is your main income… the tax from that income and also seller fee’s and fba’s fee’s… In order for A2X to work correctly (for everything to match up) the invoice is based on inclusive VAT, however, Amazon fee’s and FBA fee’s are issued by Amazon outside the UK therefore you must reverse VAT. If you do the mappings in A2X for Reverse VAT it’s treating the net as the gross… so your taking away VAT from the amount when in fact under the Reverse VAT rules it clearly states you must add 20% vat (so the sum should be exclusive of VAT)… I’ve managed to get around this by creating another invoice that takes the two lines off the main invoice and has these two lines in another invoice set to exclusive of VAT… But I was wondering how this issue has never come up before… As far as I’m aware it’s simply not possible to have amounts that are based on being exclusive for vat and others that are inclusive of vat on the same invoice… any help welcome 
18 replies
Seller_WIxmg0vWiKhyJ
Probably not much help since we don’t use Xero, but QuickBooks with Entriwise doesn’t have such issues AFAIK.
It’s amazing though that such a basic case is not handled right in Xero.
In our case, Entriwise posts Amazon commission and FBA fees with reverse charge QuickBooks VAT code and this requires no manual adjustments of any kind.
Seller_IZMia0ASJ6cAm
We use link my books and xero, link my books sends an invoice to xero then you match this with the payment from amazon. The invoice shows Tax Exclusive amounts. I checked the sales figures are correct by taking amount on the invoice and adding 20 percent and it works out. Shows the fees as 20 percent reverse charge of amount charged by amazon.
Seller_IZMia0ASJ6cAm
Hi, its only one invoice. If i have say, £1200 in sales then the invoice that is sent to Xero will show £1000 and it has a 20 percent tax rate.It shows on the invoice as being a tax exclusive figure. So link my books is working out the figures and then sending them to Xero, all Tax Exclusive. The amazon fees are what amazon has charged me(expenses without any vat), on the invoice and they have the 20 percent reverse charge rate against them. I think this all correct.
Seller_3ZwwzlGK5UIeQ
Dragonmaster, great you got it sorted,
Following up with what Porterfield said, LinkMyBooks is definitely more suited for the UK/EU seller, they take things into account things such as Departure Country, B2B sales all which is needed to get your VAT returns correct, A2X use a much simplified system which may result in paying more money in VAT than you need to.
Seller_9DYaWkPMIow10
I know this was a couple of weeks back, but I can also vouch for Link My Books, the guy who set it up is an ex amazon seller, Daniel, what I like about these guys is they are always on hand for live chat if there are any problems. Link My Books
I was initially interested in A2X, but it just seemed too expensive at the time.
I can’t imagine doing this manually like before, best of luck.
