When buying PL from China.
If you expect your UK Amazon private-label turnover to exceed the £90,000 VAT threshold, or if you import significant volumes from China and therefore pay 20 % import VAT anyway, registering is usually worth it because you can reclaim that import VAT, offset the VAT on Amazon fees, and look more credible to wholesale suppliers, though it means charging 20 % VAT on UK consumer sales, filing quarterly returns, and keeping strict records; below the threshold, the choice is mainly about cash flow and admin: staying unregistered lets you price more competitively to UK end customers, but you absorb import VAT and can’t reclaim fees, so the tipping point is typically when recoverable VAT exceeds the extra administrative burden and price impact.
Not until you need to be. If you’re based in the UK I think it’s always best to not register until you hit the threshold. Your margins will be better and there’s less admin in the form of filing VAT returns each quarter. That said, you should consider setting up your business as if you were ie work out your pricing as if you had to charge VAT), as this will ease the transition of going VAT registered and will also give you a better idea of the scalability of your PL product.
Yes, it saves money on import tax and keeps your business following the rules.
Remember, the main benefit of being VAT registered is being able to offset it on all the ‘things’ your business needs.
If you are selling on UK Amazon, you should register for VAT now. It is very strict.
This is no longer true as of August 2024 since Amazon began charging and paying VAT on their seller fees up front. Non registered and those on flat rate scheme are now at a disadvantage.
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No, they aren’t.
Two sellers with exactly the same circumstances. The non registered seller will have a great profit margin. How do you think giving money to the government is increasing your profit?
Your Amazon fees should be around 35-40% for majority of sellers. If someone is making 50k a year on Amazon, they are better off being charged maximum 4k in VAT on Amazon fees than having to pass on over 8k to HMRC if VAT registered.
For most sellers the fees should be less than this so they’re at an advantage by not being VAT registered.
Plus when the seller does eventually go VAT registered, they can backdate their expenses 6 months and reclaim the VAT paid on that.