Amazon VAT on Amazon fees charging from exempted sellers.
Can we give a suggestion to Amazon to not a charge VAT from seller who are legally VAT exempted according to UK law and are under 90K threshold. Charges VAT on fees clearly damages small businesses who are under threshold. Government has given this threshold to support business but still VAT exempted are paying vat. It should not be collected from the sellers who have completed there VAT established verifications and are VAT exempted according to Law.
Amazon says they can claim it back but to claim you have to register for VAT and when you register you pay 20%. There is a error in this calculation which is damaging profits of small sellers.
Amazon VAT on Amazon fees charging from exempted sellers.
Can we give a suggestion to Amazon to not a charge VAT from seller who are legally VAT exempted according to UK law and are under 90K threshold. Charges VAT on fees clearly damages small businesses who are under threshold. Government has given this threshold to support business but still VAT exempted are paying vat. It should not be collected from the sellers who have completed there VAT established verifications and are VAT exempted according to Law.
Amazon says they can claim it back but to claim you have to register for VAT and when you register you pay 20%. There is a error in this calculation which is damaging profits of small sellers.
6 replies
Seller_76AUwmqvSyRIM
It’s a nice idea but tell me something.
If you, as I presume a UK-based business, purchases a service or goods or office supplies etc from another VAT-registered business, do you pay VAT or not? Do you tell them “I’m not VAT-registered so please don’t charge me VAT”?
No you don’t because they have no choice. They must charge you.
Amazon is the same.
Seller_FQHkqHJI5SqTh
That has got to be one of daftest, ill-informed things I have ever read.
Do you really think you should be running a business?
Seller_mS10UjVYuuGor
VAT exempt status is not (and never was) a UK law but was a terminology historically used by Amazon pre August 2024 when it applied a reverse charge for VAT on fees through its Luxembourg trading address for sellers across Europe. Basically a legal accounting loophole which effectively meant nobody was paying VAT on the services provided by Amazon.
Eventually most European countries worked out that they were losing out and forced Amazon to use a trading address in their individual country meaning Amazon had to charge VAT on the services they provided according to that country's laws, the change was made at the middle of last year. Now UK based sellers pay UK VAT on fees, German sellers pay German VAT, French sellers pay French VAT etc etc.
You are not at a disadvantage as all your non VAT registered competitors are in exactly the same boat and your VAT registered competitors will see you as having an advantage as you don't need to add a VAT element into your selling price.
It's worth remembering that while £90K turnover is the threshold at which a business must register for VAT some businesses can benefit by registering at lower turnover, an accountant is usually best placed to advise.
Seller_DfMOm9tgJKAex
you not exempt, you are exempt from charging VAT
do you ask for exemption for all you non food items in the shops?? NO? well you are being charged VAT there
you realise there are things that VAT registered companies are legally required to charge VAT for and your amazon fees are on of them!
one of the benefits of being VAT registered is that you get to reclaim the VAT on your purchases
its NOT damaging small sellers, no more than the VAT on the stock that you buy in to sell you can't get that back either
