Hello,
I need guidance regarding Amazon VAT charges in the UK. Our account owner is a UK resident, but Amazon is deducting VAT from our earnings. We thought Amazon exempted UK residents from VAT until sales reached £85,000-£90,000 annually. Our account is new and hasn’t reached that threshold.
You need to declare vat exemption in order to not pay VAT on sales. You only pay VAT on Amazon fee and commissions. Can you please be clear on what VAT Amazon deducted whether it’s on sales or fees.
Register for VAT and claim back. This is the way.
If they are a UK resident, Amazon will not deduct VAT even if they exceed the threshold. It is the account owner’s responsibility to pay VAT to HMRC.
If Amazon is deducting Marketplace Facilitator Tax, then it would appear that Amazon have determined that the account owner is not resident in the UK for VAT purposes. There will be something in the account owner or their business details that indicate that.
If it is VAT on fees that is being deducted, then this is something that everyone now pays. They can reclaim it if they are VAT registered, which it seems they are not so they can’t.
Amazon know that many non-residents try in many ways to defraud the UK tax authorities by using dubious people or fake companies. If the account owner is above board and definitely a UK resident, they will be able to sort it out.
The only reason Amazon is charging now and not before is that Amazon services were not registered for VAT purposes in the UK, but now they are. Do not confuse input VAT with output VAT. Input VAT can never be avoided, regardless of residency status, as long as your service provider, in this case Amazon, is a VAT-registered entity in the UK. When they were not registered, they charged no one, but now that they are, they are charging everyone.
Everyone has to pay VAT on fees now.
The VAT threshold your referring too is only relevant for going VAT registered to claim back VAT and other expenses.
These changes came into place in August I believe.
You will have to pay vat on every transaction from 1st August.
Are Amazon VAT fees charges applicable to all sellers whether they are UK residents or not?
Please check my earlier answer 
Thanks for guidance
Yes Amazon is now charging VAT on their fees irrespective of residency.
There is no more VAT exemption, guys. You will be paying VAT on fees, and if you’re VAT-registered, you can claim it back. If not, there’s nothing you can do.