Non-Established for Tax Purposes - payouts with-held
Hi,
I'm wondering if anyone can help or advise with this issue.
Basically we received a message from Amazon 6 weeks ago saying that HMRC had told them we were NETP (Non-Established for Tax Purposes in the UK). Amazon have put a hold on our payouts until this is resolved.
We agreed with this assessment and told Amazon that they can start collecting VAT for sales dating from 1st January 2025. We have been remitting VAT direct to HMRC on all sales since were were VAT registered in September 2012.
However, Amazon are insisting that they have to take the VAT liability calculation back to June 2021 and that we have to claim this VAT back from HMRC, then remit to Amazon, who will, in turn, remit to HMRC. It seems a very cumbersome way of doing things, but HMRC confirmed that this is the only way to do it, so it is what it is.
Our issue is that in order for us to reclaim this VAT, we need a quarterly breakdown from Amazon for each quarter's VAT amount to show how they got to the VAT liability figure they say we owe. Our accountant has asked us to get this breakdown, I asked Amazon last Thursday for this information and received a 'bounce back' style e-mail that says 'We have contacted our internal team for information regarding your issue', but it's been almost a week with no response.
Our balance in Amazon is now approaching 500,000 GBP and we are beginning to struggle to pay bills and order new stock. Account health call backs don't help at all as they don't understand the issue and I am not receiving any responses from the e-mail addresses I have been told to message. It's really frustrating.
Any help or advice?
9 replies
Spencer_Amazon
Hello @Seller_0xavPE91kwzcZ,
I checked and saw an email was sent to you on the 17th of May with the reports you requested.
Let me know if there is anything I can do for you.
Regards, Spencer
Seller_Jl0QHDp7ab1Ha
Hi Spencer @Spencer_Amazon
We just start a new thread and wrote in detail what happened before.
You can forawrd to https://sellercentral.amazon.co.uk/seller-forums/discussions/t/620317fb-97b3-4ffa-b21a-2b9d9598225c?postId=620317fb-97b3-4ffa-b21a-2b9d9598225c
Actually we have same issue with this poster but we paid all the amount of owed VAT which amazon calculated.
Best
Seller_0xavPE91kwzcZ
Hi Spencer,
Thank you for the reply. Yes, we received the breakdown so we can reclaim from HMRC. But we now have the additional issue that Amazon has erroneously been charging us VAT on all service invoices. We are not located in the countries indicated by Amazon that VAT will be charged so VAT should not be charged on any of our invoices.
So we now require that Amazon refund all the VAT on invoices they have charged since 1st January 2021 and reissue these invoices showing no VAT. I have e-mailed kyc-drtax-verification@amazon.co.uk multiple times with no response. This morning, I have sent a spreadsheet to the same e-mail showing all invoices with VAT amounts and gross/net amounts with invoice numbers that require refunding and amending.
Should I be contacting a different team about this?
Seller_0xavPE91kwzcZ
Hi Spencer,
This situation has been ongoing for 3 months now. All of our disbursements are still blocked and it's like banging my head against a brick wall trying to get this resolved.
To date we are still waiting for:
1. the advertising team to refund all VAT that has been erroneously added to invoices and paid by ourselves and reissue these invoices without VAT
2. We are also waiting for a response regarding the refund of VAT on seller fees from last year that Amazon incorrectly charged on our invoices
3. We require urgent confirmation that Amazon are now not adding VAT to invoices, as is required due to Yum Asia being an NETP (not based in any country that Amazon would charge VAT)
4. We require a corrected monthly sales transactions report (VTR) dating from 01/01/2021 onwards to show that Amazon is now responsible for paying this VAT
Amazon are not making this easy - this is your mistake which we are now paying to correct, so the least we expect is timely co-operation from Amazon with the information we require.
Please note that we have not been provided with any e-mail address to contact to resolve any of this, so we are having to send multiple e-mails to different addresses in the hope that someone can help.
We are on the verge of submitting a formal complaint to the FCA regarding Amazon's actions.
Please can you help with this?
Spencer_Amazon
Hello @Seller_0xavPE91kwzcZ,
I am working with our partner teams on a solution.
We stay in touch.
Regards, Spencer
Seller_MT8rt0A2OpbCx
As advertising is a service essentially delivered in the U.K. and I assume you are invoiced from Amazon U.K. I am not sure if adding VAT is incorrect.
Where is your company established? Some EU countries should charge local VAT if you are established there and your invoices would be from Amazon in that country (same applies to 3.) As you have a UK VAT registration and presumably one in your home country, have you been claiming the VAT on fees back on your returns?
Not entirely Amazon's mistake. If you sell in the U.K. (or any other country) you should be aware of and up to date with all the applicable legislation. if you had registered as a NETP in the first place, this could have been avoided. I do agree that Amazon seem to make this type of thing extremely difficult and convoluted to resolve, with any excuse to hold on to your money for an unreasonable time.
Seller_0xavPE91kwzcZ
We are a VAT registered business and always have been. We have told Amazon on numerous occasions that we are NETP. We are not based in any EU country (we, the partners of the business and where all business decisions are made) are in Thailand. Under B2B rules, if a company has a UK registration number, VAT should not be charged on any invoice because it is a B2B supply and in addition to this, the place of supply is deemed to be where we, the business are located, therefore no VAT should be added to invoices.
This issue is completely on Amazon - we have always been NETP since we first registered for VAT dating back to September 2012, we only started selling on Amazon in 2018. Amazon assumed because we have a UK address on our VAT certificate (our accountant,as this is HMRC's rule) that we are UK based, when the presence of a UK address does not automatically mean that a business is established in the UK. Amazon know this and have not been properly handling the VAT on our sales.
The absolutely stupid thing is that we have already paid all of this VAT to HMRC, but there is no common sense being applied. We asked if Amazon could just start collecting the VAT from January of this year, but they said no. HMRC also confirmed this and the agent I spoke to agreed it was convulted and a little crazy but it's the only way to resolve. Surely given there will be many sellers in this situation (I doubt Amazon has been handling any NETP's VAT correctly), it would have been easier to agree to start collecting from the beginning of this year rather than making sellers claim back 4 years worth of VAT?
We are still getting the run around from Amazon, getting automated responses to our very specific queries for information and documents. We need their help to be able to reclaim this VAT from HMRC but they just keep telling us the concerned team have been told to look at this as a priority and nothing happens (this has been 6 weeks getting this message now). We have tried escalating complaints, but all we receive are e-mails saying they have 'resolved your complaint' with the same automated reply which isn't addressing what we have asked! I have tried several e-mail addresses, the formal complaints e-mails, the MD's office.
For reference, we confirmed (again) to Amazon on 9th April that we were NETP, so this runaround has been going on for 10 weeks now and all the while, we are getting no disbursements at all and we cannot proceed with the reclaim until we have all of the documents we require from Amazon.
Spencer_Amazon
Hello again @Seller_0xavPE91kwzcZ,
I have requested an update from our partner team.
Regards, Spencer
Seller_ZQyopdiwkUHOZ
It seems that they were properly declared.
