Need help understanding why Amazon collected VAT from me
Hi all,
I will try to make this simple, though I am trying to still understand what and why it has happened.
I have recently started selling on Amazon and apparently my export options were enabled, so about 20 people from Ireland ordered items from me. I obviously don't mind that, however what I mind is that the final selling price I am being paid based off appears to be excl. VAT.
I can see that after Amazon deducted 20% from my item's price, they added 23% for the customer to cover the Irish VAT. What the issue is, for all of those orders, the sales appear -20% of what my item is listed for. For instance:
- The item is selling for £20.69
- Unit price (VAT exclusive) shows as £17.24 (-20% of the above price)
- Unit price (VAT inclusive) is £21.21 (+23% of the ex. VAT to accommodate for Irish VAT)
Tax is £3.97, which Amazon deducts from the £21.21; after that, I get charged the Commission and FBA fee, both totalling for £5.17.
The total I get paid is £12.
If those fees were deducted from £20.69 (my item's price), I should have been paid £15.52.
On top of that, the fees have been charged based on a price of £20.69, not £17.24.
I am not VAT registered, I am VAT exempt and have declared that. I have tried explaining Amazon the issue via email, but I got a couple of copy/paste responses from the FAQ about VAT collection and whatnot. I have asked this to be escalated to someone who either knows how to handle the query or has the authority to. I am happy if they explain to me why this is happening, if there is a reason I can't understand, but my emails are being ignored at this point.
Those 20 orders are totalling for half of my orders so far and my profit is almost gone. As a new seller, I am incredibly frustrated and demotivated. Maybe I shouldn't be and there is a valid reason this has happened, however there's no one from Amazon to explain that to me. If I am at fault for having exports enabled initially, I guess that's on me - that setting is off now until I figure out what is that I did wrong.
Any input on this will be much appreciated!
Need help understanding why Amazon collected VAT from me
Hi all,
I will try to make this simple, though I am trying to still understand what and why it has happened.
I have recently started selling on Amazon and apparently my export options were enabled, so about 20 people from Ireland ordered items from me. I obviously don't mind that, however what I mind is that the final selling price I am being paid based off appears to be excl. VAT.
I can see that after Amazon deducted 20% from my item's price, they added 23% for the customer to cover the Irish VAT. What the issue is, for all of those orders, the sales appear -20% of what my item is listed for. For instance:
- The item is selling for £20.69
- Unit price (VAT exclusive) shows as £17.24 (-20% of the above price)
- Unit price (VAT inclusive) is £21.21 (+23% of the ex. VAT to accommodate for Irish VAT)
Tax is £3.97, which Amazon deducts from the £21.21; after that, I get charged the Commission and FBA fee, both totalling for £5.17.
The total I get paid is £12.
If those fees were deducted from £20.69 (my item's price), I should have been paid £15.52.
On top of that, the fees have been charged based on a price of £20.69, not £17.24.
I am not VAT registered, I am VAT exempt and have declared that. I have tried explaining Amazon the issue via email, but I got a couple of copy/paste responses from the FAQ about VAT collection and whatnot. I have asked this to be escalated to someone who either knows how to handle the query or has the authority to. I am happy if they explain to me why this is happening, if there is a reason I can't understand, but my emails are being ignored at this point.
Those 20 orders are totalling for half of my orders so far and my profit is almost gone. As a new seller, I am incredibly frustrated and demotivated. Maybe I shouldn't be and there is a valid reason this has happened, however there's no one from Amazon to explain that to me. If I am at fault for having exports enabled initially, I guess that's on me - that setting is off now until I figure out what is that I did wrong.
Any input on this will be much appreciated!
6 replies
Seller_QuM1AZgzfU9x4
You've done the right thing by disabling exports.
Otherwise there really isn't really much for you to understand, nor did you do anything wrong other than allowing exports.
Your VAT exemption in the UK (which only really applies to most of Amazon's fees) doesn't impact having to pay non-UK VAT.
Seller_MT8rt0A2OpbCx
This has been in place for a couple of years. There were many posts about this when the regulations about marketplaces paying VAT directly for exports started.
A VAT registered seller would be able to class an export sale as zero rated and not pay HMRC the VAT, so no worse off than a U.K. sale. Unfortunately, Amazon (unlike eBay) use the same calculation, ignoring whether or not you are VAT registered.
Unless Amazon change their algorithms, all non VAT registered sellers are in the same boat. The only current answers are to increase your prices to compensate, disable all exports or get VAT registered.
Seller_76AUwmqvSyRIM
Your problem has been explained to you by others but it's not just non-VAT registered sellers that should be concerned.
I urge every VAT-registered seller to check every single FBA-Export sale, in particular those to Ireland and the Channel Islands. Every now and then, Amazon deduct UK VAT AND the destination country VAT before paying you.
This double taxation problem has been going on since Brexit. It always takes weeks to resolve each occurrence but I always eventually get the money back. I gave up once around 18 months ago and claimed via the small claims court before I got my money back. This week, once again, after giving up on the email ping pong, I have taken them to the small claims court again. It is so frustrating.
We're no talking a lot of money. This week's case is worth less than the court fee but as it is the only way to get them to understand, I am not prepared to sit back and see Amazon stealing my proceeds. It's not as if they need it.
In early February, they told me the technical issue was fixed. Then a week later, it happened again. What a waste of time.
