I have been declared VAT exempt for a few years now as my seller account was just ticking along and have been under the hmrc threshold. I understand that there is no vat exemption now, as vat is paid on fees by every seller since august. I’d assumed we were automatically now paying vat, deducted from our account. However I just looked at my account and it still states I am declared as vat exempt.
So was I meant to undeclare? and should I ‘undeclare’ myself?
I’m considering voluntarily going VAT registered with hmrc as clearly there’s no longer a benefit, and in fact we’ll be paying vat on fees (when I’m no longer exempt) which we cant claim back as someone who is vat registered can. My understanding is Amazon now ollect vat on our behalf, as opposed to when I was last registered and we had to collect vat on hmrc’s behalf.
Lastly, and I really hope this isnt the case, but is amazon’s bot system slowly getting round to undeclaring vat exempt sellers, and we’re going to be hit with a vat bill on the fees that havent included it since august??
Do your maths before voluntarily registering. Yes, you will claim back the vat on the feeds but you will have to pay vat on all your sales.
Unless you are selling a lot to businesses who will want to claim vat back or is you are selling zero-rated items, there is no benefit to register voluntarily until you are likely to reach the threshold.
BTW, Amazon don’t collect VAT on your behalf unless you are not resident in the UK when they do. You will have to pay it from your sales.
There’s lots of info on VAT on the HMRC website but ion any case, ask your accountant’s advice.
Thanks yeah my accountant’s advice (we mainy sell to businesses, although few are business buyers) is basically either absorb the cost of the extra vat fees, or up your prices if it won’t hamper sales too much.
Any thoughts on why though they aren’t charging me vat on fees (least i dont think they are, where best to check? Monthly summary reports certainly say zero tax applied) and I’m still ‘exempt’? As I say, my fear is they’re going to backdate to august and say you shouldve been paying vat on those fees, a scary thought to say the least. Could they do that you think?
Well, Amazon’s systems often aren’t properly synced in terms of your entity data on file and their processes. If you are confident you should be getting charged VAT on your fees and you aren’t getting charged, at some point in the future, it can happen that they will inform you, there is a backdated liability to pay, just like they did with the non-established taxable persons issue.
However, I believe for this to happen, there would have to be lots of others in a similar situation as you.
I would rather not tamper with anything or contact Amazon to let them know something may be wrong. They are known to suspend accounts when someone is poking a sleeping bear.
If your account still states that you are VAT exempt, it’s likely because you haven’t undeclared your exemption, which you would need to do manually in your Amazon account settings. Since August, all sellers are charged VAT on fees regardless of their VAT registration status, so being VAT registered would allow you to reclaim VAT on fees, offering a financial benefit. Amazon now collects VAT on your behalf for applicable sales, simplifying the process compared to when sellers had to remit VAT directly to HMRC. It’s unlikely that Amazon will retroactively charge VAT on fees from exempt sellers without notice, but to avoid any complications or potential liabilities, it’s advisable to review your VAT exemption status and consider voluntarily registering for VAT with HMRC if you exceed or are close to the threshold.