Need guidance on what should be the best way forward

A friend has been running an Amazon UK account for almost a year now and was not aware about VAT. He received a notification from Amazon regarding this. He is liable to pay almost £8k which is more than what he has earned so far.

He does not mind paying the VAT but he cannot do pay it in one ago and wants to know if there is a way to paying it in installments.

Alternatively, he is thinking of cashing out his account that has inventory worth £4-5k in case he has to pay in one go. He has already opened a separate account in the US too.

I don’t believe there is an instalments option. He may have to take out a loan to pay it.

But I question your statement “which is more than what he has earned so far”. How can this be possible?


He can contact HMRC directly and clarify. Agreements for installments are always possible directly with HMRC.

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Trouble is they have to pay Amazon, not hmrc.

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If he is not a UK citizen then he needs to register for VAT from the beginning.

He needs to seek advice from an accountant as there would be money to claim back from purchases.

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What’s his turnover? If his turnover was over 85k in a 12 month period, he should have registered for VAT.

If it’s Amazon saying he’s liable for 8k VAT payment, that’s probably not considering what can be reclaimed.

This is really a question for his an accountant to get official financial advice.

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He thought he will not be making as much. Plus, now he is saying that he needs to pay VAT regardless, because he is not a UK citizen.

How much do you usually reclaim in PL business? Hope the question is relatable and can help us make a better decision. He doesn’t have an accountant in the UK as much as I understand. Need as much guidance as possible before taking any decision or approaching an accountant.

An impossible question to answer.

You can reclaim vat paid but it depends on which country you have paid the vat in. I am not an expert in international taxation I’m afraid.

If your friend wants to continue in his business, he has to register. There is nothing to help them make a decision as that is the only answer.

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Amazon are obligated to collect VAT for non UK sellers. What your friend did is wrong, he should have registered for VAT with HMRC as a foreign company/person.

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Sorry man, it’s not relatable, there is usually claim amount at all.

It’s different for every business depending on your model, the level you are at, where you buy and sell.

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Talk with a professional tax accountant. Here’s not the right place for tax advice.


If he’s registered as sole trader, he could switch over to LTD company and that may reset his VAT threshold, I think…