VAT exemption declaring issue
Dear forum,
I have a query about VAT.
A while ago, I made a sale to a business account. Because of this I received a message from Amazon that the invoice defect rate is over 5% and that my account is at risk of being deactivated. Amazon said that in order to reduce that number, I need to provide an Invoice with a valid VAT number. So I enrolled for VAT with GOV.UK.
However, after a chat with my accountant I was informed that I do not need to register for VAT unless my turnover is higher than £85,000 per year, which will most certainly not be, at least for the first years of the business. Registering for VAT without needing to do so, will reduce my business profit so I want to deregister. I have added my VAT number to Amazon, but I would like to delete that. The logical step for me to do is to activate automatic receipt generation declare myself VAT exempt to Amazon FBA, but when I try do that, I receive the following message:
“You are not eligible for automatic receipt generation.
According to our records, you do not meet the Terms and Conditions of the VAT registration exemption. Consult your tax advisor to determine your EU VAT registration status and complete your tax settings.”
I must mention I received the same message even before registering for VAT and adding the VAT number
Do you know why I am not eligible for VAT exemption?
Kindly be informed that I sell and I will only sell goods ONLY in the UK marketplace and my business is also based in the UK and my annual turnover is going to be under £85,000 VAT threshold. Given this information, I do not understand why I am not eligible to declare myself VAT exempt.
Could you please clarify? I do not want to have the unpleasant surprise of having my account deactivate, but also I do not want to pay VAT in the case I do not need to do so.
Thank you
7 replies
Seller_7VbclcPFFRTnc
once you deregister for VAT amazon will need to see the deregistration certificate
as for you not being able to sign up for the vat calculation services, unfortunately once you have been registered, they won’t allow you to state that you are exempt and therefore you will need to manually submit invoices
Seller_ejwc84JNL5Uk6
Are you personally (or any other person involved in the business) also UK residents? If not you need to be VAT registered.
Also you may find Vat de-registration takes some time (there may be a time limit on this in UK as in Germany, which is 2 years). Amazon will require an official letter confirming de-registration from HMRC.
One other thing - several sellers have said that once registered with Amazon for VAT it seems almost impossible to get them to accept this.
Little Shop beaten me to it!!