VAT Charges on Referral Fees & FBA Services Despite Not Being VAT Registered
Hello, I’m seeking some clarity regarding VAT charges on my Amazon seller account. My business is registered with HMRC, but I have not crossed the current VAT threshold, so I am not required to file VAT returns or register for VAT.
However, I have noticed that Amazon is still charging me 20% VAT on referral fees & FBA services. Is this valid, given that I am not VAT registered?
If so, I’m confused about the purpose of the VAT threshold provided by HMRC.
Can someone explain why this is happening & how it aligns with the VAT threshold rules?
Thanks in advance for any insights!
VAT Charges on Referral Fees & FBA Services Despite Not Being VAT Registered
Hello, I’m seeking some clarity regarding VAT charges on my Amazon seller account. My business is registered with HMRC, but I have not crossed the current VAT threshold, so I am not required to file VAT returns or register for VAT.
However, I have noticed that Amazon is still charging me 20% VAT on referral fees & FBA services. Is this valid, given that I am not VAT registered?
If so, I’m confused about the purpose of the VAT threshold provided by HMRC.
Can someone explain why this is happening & how it aligns with the VAT threshold rules?
Thanks in advance for any insights!
15 Antworten
Seller_469SU3Aj73sZL
There been a lot threads on this Amazon loss a court case and Ist August is required in UK to charge at 20% on its feee, Your accountant will advise you how to deal with in respect to Business costs/Expenses.
As with any other VAT paid its a business expense however as Not registered you cannot reclaim it directly
Seller_ZVAz3d5lZuGid
As above reply and as from 1st August, Amazon now charge you VAT on all the fees, regardless of if you are VAT registered or not. We did have email about it and was in the news section. The VAT threshold, now £90,000 is when your turnover (not profit) reaches that level. Then you can claim back the VAT paid when you submit your quarterly VAT returns.
1 August 2024
Update to Amazon UK and EU agreements and VAT treatment now effective
As previously communicated, effective August 1, 2024, Selling on Amazon, Fulfilment by Amazon, and all other services previously supplied by Amazon Services Europe S.à r.l. ("ASE") will be supplied by Amazon EU S.à r.l. ("AEU").
All agreements, policies, terms and conditions that previously referred to ASE, including Amazon Payments agreements, will now refer to AEU. Please consider any reference to ASE as a reference to AEU. Additionally, all invoices issued by Amazon will be issued by AEU, instead of ASE.
If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply and VAT will be charged on your Amazon fees.
Seller_DfMOm9tgJKAex
you pay vat on good in the UK shops, even though you are not vat registered.. your not exempt just because you are not registered
Seller_76AUwmqvSyRIM
As you are in business, it's worth reading up on VAT otherwise you may trip up in the future.
Once your sales reach or are likely to reach the threshold, you need to register.
When you are not VAT-registered, payments you make for goods and services are likely to include VAT.
Once you register for VAT, you are able to claim back the VAT from HMRC. That's the plus.
The minus is that you will have to charge your customers VAT and pay HMRC the amount collected (1/6 of the sale price at the time of writing).
Seller_hOZNPw7G8FIjl
Yes totally valid. If not VAT registered you pay VAT on fees - as you do on all your business purchases
Seller_tRuvBEHDedp4q
VAT registration is totally different from being charged VAT
Look at any of your suppliers invoices, utility bills, shipping costs, etc - they are all charging you VAT
While you are below the threshold requiring you to register you are still being charged VAT - you just cannot reclaim it back.
Once you pass the threshold then you can reclaim VAT paid out but have to charge VAT to your customers and send the difference to HMRC
As Amazon were previously invoicing from Luxembourg, a loophole meant they did not have to charge VAT if you were not registered. As from August, Amazon will be invoicing from the UK office closing this loophole.
Seller_J2H5GprhaORbt
Even though you have not reached the VAT threshold to be registered , you may well find ir beneficial to register anyway
Seller_DfMOm9tgJKAex
the purpose of the VAT threshold is so that small and new companies do not have to charge or report VAT
One of the downside of not being VAT registered is that you can not claim VAT back on your purchases and expenses
not being VAT registered does NOT exempt you from paying VAT on you purchases and expenses,
Seller_SgrYVwQcsHQ6Q
It doesn't matter, amazon will charge vat regardless of being registered or not. From 1st August this applies.
Although Vat registration is a different story, you must learn before deciding. It's not something we can explain in simple words.
Sakura_Amazon_
Hello @Seller_2T9uVgunzsirE
Here I am sharing an Amazon News thread that covers the following topic: Update to Amazon UK and EU agreements and VAT treatment
I am encouraging you to review this thread, and if you still have doubts, please post your question there.
Regards,
Sakura
