Hello,
We have been selling on Amazon for 5+ years. We are VAT registered but all the products we sell are zero-rated so until now we have never had to pay VAT on sales.
However we recently launched a product which is standard-rated so we need to pay 20% VAT on all sales of that product. We only sell on Amazon UK.
I’m struggling to wrap my head around the Amazon transaction reports when trying to work out the VAT that is due to HMRC.
"Item-price column" - If I tally this up, it gives the total revenue. I then divide this by 1.2 (which gives me the gross value of sales) and then multiply the result by 0.2 to work out the 20% VAT due. The figure in this case is £3863.47
But there is another column named "item tax". If I tally up the sum of that column, the result is different to the one above. It comes to £2,963.28
So which is it?
And to add more confusion, we also use 'coupons' for this listing. The coupon value is reflected in the "item-promotion-discount" column.
So that begs the question - when working out the VAT amount due, do I first need to deduct the coupon amount from the "item-price"? For example if the product sells for £15 but there's a £3 coupon, do I work out VAT on £15 or £12?
The VAT return deadline is approaching and I really need to figure this out so if someone could assist I'd be ever so grateful.
Our accountant is old school and doesn't really know how Amazon works so he is unfortunately of no help. We're in the process of looking for a specialised Amazon accountant so any recommendations on this would be appreciated too.
Thanks for any help!
