Paying VAT on Amazon

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Seller_imHay0TAVhC7w

Paying VAT on Amazon

Hi,

I am a UK based business and running a newly started business and want to start selling via Amazon. To start, I have decided to register as an individual seller to get the feeling of market before upgrading to pro-seller.

I am not VAT registered and don’t need to register as I am not exceeding the VAT threshold anytime soon.

Amazon CS is saying that they automatically collect VAT on my products. I have explained to them that I do not need to pay VAT as i am not passing the VAT threshold but I am not having much luck with them. I also can’t claim VAT from HMRC as I am not VAT registered.

Can someone please advise if it is a common practice by Amazon to collect VAT on all sellers despite they pass the VAT threshold or not. If they do, how can I claim VAT as a non VAT registered business.

I have been reading many seller forums about this topic in the past couple of days in here that just made me confused with conflicting information.

I would appreciate if someone could guide me to the right direction in here.

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36 replies
Tags:Payments, Registration
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Seller_qZO3ZCjoBXEeL

Where are you resident? Are you a UK citizen?

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Seller_BS5lg2keRs2QO

Are you confusing them collecting VAT on the fees rather than the items? It’d be helpful to see what you asked them / what they responded.

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Seller_tRuvBEHDedp4q

Yes - for example

You sell something at £50.

If you are Non VAT registered:
Amazon would charge you (75p + 15.3% referral fee) + VAT - so you would make £50 - 0.75 - 7.65 - 1.68) = £39.92

If you are VAT registered:
Amazon no longer charge VAT, but you now have to include VAT in the selling price so the calculation is now: £50 - 0.75 - 7.65 = 41.60 - VAT on £50 (8.33) so you now make £33.27

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user profile
Seller_DROodOAYHftnc

Have you registered with a Business Seller Account ? - are you confusing the Individual Seller Account, with the Individual Selling Plan ? - Amazon in their wisdom (!) named two totally different things the same ! - apologies if you know this and I have picked up the wrong end of the stick, but this is a mistake many new sellers make.

You need to be registered with a BUSINESS Selling Account - the legal entity - and you will be required to upload your UTR to complete verification.
You can be on either selling plan as a business -either Professional where you pay £30 a month fee, or Individual (Basic) plan where you pay an extra fee per sale.

You will pay VAT on all the fees, we all do whether VAT registered or not. You cannot claim VAT back if you are not VAT registered.

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