FRS or Normal Vat
Hi.
I sell items for
Product- £9.99
Amazon Seller Fees £3.04
Can anyone show me what the difference will be with FRS at 7.5% and standard VAT from August 2024?
Im sure it will be
FRS- 0.60+ 0.97= £1.57 to pay on VAT
Standard- £1.99 VAT to be paid
Is this correct?
Thanks,
14 replies
Seller_QuM1AZgzfU9x4
Not quite. If you are sticking at £9.99 then standard VAT would be £1.67 since it is included in the price.
As for the flat rate, i confess to not understanding any of the figures you've used. In fairness it's almost exactly extremely hot here so it may well be me.
Worth noting that Amazon do not recognise flat rate VAT.
Seller_MT8rt0A2OpbCx
As far as I understand it, the only change is the VAT on fees. Presumably Amazon do not currently charge VAT on your fees (reverse charged) After the change they will add 20% VAT to your fees, i.e. £3.04 + 0.61. If you are on standard scheme, you can claim this back, as it is U.K. VAT. If on flat rate, you can't.
Seller_d8YGbIjNqwFxn
Remember on the Flat Rate Scheme you can't claim back any VAT that you pay on services and purchases.
I don't think your figures are right.
FRS you will pay 75p VAT on the item price. On full rate VAT you will pay £1.67 on the item price
Regardless of what scheme you are on you will pay 20% VAT on your fees which will be £0.61
If you are on standard Full VAT Rate you will be able to claim the £0.61 back on your VAT return
EDIT: Post changed as incorrectly calculated FRS VAT
Seller_CaLuDGa8aUCi3
Below is not correct. Standard Rate will be £1.67 VAT. FRS net cost will be £1.36 (made up of 75p VAT to pay to HMRC, and 61p VAT charged by Amazon that can't be reclaimed under FRS). Under FRS you also can't reclaim any VAT charged on the cost of goods, and on PPC advertising, and any other business cost. Standard VAT may therefore work out cheaper, but speak to an Accountant.
FRS was never meant to be a lower tax option, it's there to make fillings easier. The fact amazon reverse charged the fees created a loophole, wich HMRC appear to be closing.
Im sure it will be
FRS- 0.60+ 0.97= £1.57 to pay on VAT
Standard- £1.99 VAT to be paid
Is this correct?
Seller_CNXMnZmfYYY3b
Product Price - 9.99 - VAT 1.66 (20%)
Your COG - Product price will be higher before you cant claim back Import VAT or manufacturing VAT. So consider that.
Product price 9.99 0.70 VAT on flat rate 7.5% (6.5% first year).
up until the announcement 9 days ago you didn't have to pay vat on fees on the flat rate scheme. very unlucky but now you will have to pay VAT on fees (3.04) - 0.51
so flat rate 0.51 + 0.70 = £1.2
When you include claiming back VAT on the COG and other expenses it might even be better on full VAT.
I used flat rate scheme up to £230k limit and it was a dream. Paid 6.5% and NO VAT on fees.
