Hi all,
my Amazon business turnover is currently less than £25k (and slowly growing), however, VAT is a major cost which I can’t offset against my purchase VAT.
Regards, Alan
If you sell mostly to non-vat-registered customers, it probably is not financially beneficial to register as you will have to charge vat on your sales.
If you sell to vat-reg businesses, then if you are not vat-reg, it might put some off from buying from you as they won’t be able to recover any vat and you may lose out to vat-reg sellers.
The decision is yours. Personally, 20 or so years ago, I decided to register voluntarily.
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You shouldn’t limit yourself to staying below the VAT threshold when selling on Amazon. Aim high, or don’t quit your day job just yet. It’s easy to stumble upon a trend or a big hit—even a single ASIN could push you beyond the threshold.
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No you’ll be worse off, unless your going to put up your selling price by 20%.
Absolutely not, you will almost definitely pay more to HMRC than you can claim. Speak to an accountant.
Prices needn’t go up by 20% as you’ll be claiming back VAT on the purchase of stock. But yes, for the same profit margin, prices will need to go up.
You can reclaim VAT on Amazon fees once you reach the threshold and become VAT registered, but for now, just keep doing what you’re doing and focus on increasing sales.