Clarifying UK Tax Obligations for Amazon Seller-Fulfilled Businesses
I'm having a hard time finding a clear answer about taxes for UK sales. If we are seller-fulfilled (not using FBA), does Amazon collect all required taxes on our behalf? Or are we responsible for collecting and remitting certain taxes ourselves? Specifically, I need to know if we should set aside a portion of the payments Amazon deposits to us after each settlement period to cover tax obligations. Thank you for your help!
Clarifying UK Tax Obligations for Amazon Seller-Fulfilled Businesses
I'm having a hard time finding a clear answer about taxes for UK sales. If we are seller-fulfilled (not using FBA), does Amazon collect all required taxes on our behalf? Or are we responsible for collecting and remitting certain taxes ourselves? Specifically, I need to know if we should set aside a portion of the payments Amazon deposits to us after each settlement period to cover tax obligations. Thank you for your help!
8 replies
Seller_hOZNPw7G8FIjl
Are you UK based? Are you UK VAT registered? If so VAT is included in your orders but Amazon do not send it to HMRC for you - you have to declare VAT on sales in your quarterly VAT return, along with the VAT you have paid on supplies etc and Amazon fees.
Might be worth getting an accountant or at least read Seller University re: VAT.
Seller_ZVAz3d5lZuGid
From your basic question, I assume you might be a new seller ? It is your responsibility to pay your own taxes to HMRC. For taxes on UK sales, you need to be registered with HMRC as a self-employed business (sole-trader, partnership,ltd company), keep business accounts and submit an annual tax return. Amazon do not take or pay your taxes. You must also have a BUSINESS Seller account on Amazon (not individual seller account) As above post, if you are VAT registered then it is a quarterly return, and you must be VAT registered once your turnover (not profit) reaches 90K.
I suggest you go to the HMRC website and read their info - all very clear and self-explanatory, and it tells you what you can claim for as business expenses etc.
This is all assuming you are a UK resident.
Seller_hk02yt1EBBFen
VAT Transaction report may also help, as it shows who is responsible for the VAT for every order on your account,
TAX_COLLECTION_RESPONSIBILITY> MARKETPLACE = amz collected vat on your behalf,
SELLER= FBA/FBM etc Seller is responsible for VAT.
https://sellercentral.amazon.co.uk/reportcentral/VAT_TRANSACTION/1
Seller_tRuvBEHDedp4q
Just to add there are 2 different taxes you have to consider - Income Tax and VAT.
Income Tax (tax on earnings above a threshold currently set at £12.570 per year and includes all income e.g. if you have another job)
VAT (tax on sales - only applicable if UK established and once turnover exceeds £90k per year, when you must register). As others have said Amazon only collect VAT on your behalf if you are NOT UK established.
If you are UK established then it is your responsibility to pay all your taxes (both Income and VAT is applicable). Amazon by law have to submit your sales history to HMRC and they are cracking down on people who do not report such income.
So in answer to your question then yes you need to set aside a portion of your income from Amazon sales for tax purposes. And do not make the mistake of only using the money Amazon deposits in your bank to work out your taxes - it is the money from the actual sales including any postage you charged that gives you your turnover (needed for VAT threshold registration). From this you can deduct costs (Amazon fees, postage charges, stationery etc) to arrive at your profit for Income Tax purposes.
