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Read onlyWell at we all know amazon seller support are absolutely useless...well beyond useless there isn't a word in the English dictionary to describe how bad they are!!
My problems with amazon first arose with the classic well know email "We reviewed the information provided, but we need additional documentation to determine whether you are established in the UK for Value Added Tax (VAT) purposes". This occurred six months into my selling journey. Despite being told by my accountant that I could register VAT free with sales beneath 90k, it turns out that wasn't the case. This was because I only had a virtual address since I am actually based in Ireland. I was informed that would suffice. All my margins were calculated based on being vat exempt, now my margins were in trouble unknowingly from the onset. A big enough hit, but turns out that was only the beginning.
Back and forth email after email with Amazon seller support team for months I could barely access funds and couldn't access my account reserves either. I finally became VAT registered in August 2024 but took months for my accountant to decide whether I should use the standard rate of flat rate. I presumed I was going to register with standard rate as amazon is opposed to flat rate now. This ended up taking three extra months to sort out with the HMRC who automatically registered me for the flat rate scheme.
Prior to my first VAT bill that was due in early December, I spend nearly a month trying to contact amazon to sort this vat situation out to access my account reserves. They gave me an email to contact them to request to pay vat. Turns out I couldn't send anything to this email because it kept bouncing and later found out it was under "maintenance". Once I could send an email I never received a response after sending numerous emails. I then went and paid the vat bill as the due date was days away.
At the start of this year, I AGAIN went on amazon and agreed that I was an NETP stating but this time I stated I already paid my tax liability to the HMRC. I also gave a detailed explanation of the same offering proof of vat payment if needed. Again issues arose. Turns out Amazon went ahead and sent vat due presumably to HMRC. I now wont receive any refund till March 2025.
More issues arose when I looked at my payments. I was informed I was due to receive my negative account reserves by many seller support providers, but today I was told the opposite - that I had to pay amazon. Additionally, on my payment section is all over the place. Last month I had positive net proceeds and a negative account reserve - that I was due to receive once NETP statues with VAT was established. However, today my net proceeds are negative and my account reserves are at zero.
Furthermore, with the additional result of a few FBA refunds my small business with a starting capital of 3K has very little capital essential for cash flow to grow it.
From day one, Amazon and their diabolical customer service has stood in the way of an already difficult business to run and be successful in. I am at the cross roads and today for the first time, despite everything thrown at me my gut is telling me to quit and throw the towel in. The payments section is entirely overwhelming. At this point, I feel overwhelmed by the situation and uncertain about the next steps
If anyone could let me know if you have experience any issues like this experience has been pretty crap and it all looks ever so bleak!
To be frank i think it's your (hopefully ex) accountant you should be mad at rather than Amazon.
As far as i know from a limited amount of time on the HMRC forum it's correct that Amazon are liable for the VAT and it's them that should pay it to HMRC.
I don't really have any practical advice, but i'd say that given what you now know about VAT you need sit down and work out what you think your business could generate in the short to medium term. If that's an amount that works for you then it's a case of planning what the next month or two should look like.
Forum lurker has put exactly what I would say to you. This is all down to your accountant giving you false and illegal information- hope you’ve now ditched them. From the start as a non uk resident you were always legally required to Be Uk vat registered if storing stock in Uk and HMRC don’t automatically put you on flat rate - its default is the standard 20%
I’m sorry I can’t offer any advice other than already stated but I do hope you can reassess your margins to see if it’s worthwhile for you.