Your disbursements have been suspended due to indicators of unmet UK business establishment requirements
Hi,
I have started this discussion for anybody that is facing the unbelievable situation that we find ourselves facing, On the 13th September 2023 we received the performance notification below that our disbursements had been suspended because of indicators of unmet UK business establishment requirements. At first i thought this would not be a major issue if i just sent Amazon the information they were asking for, however 2 months later our funds on Amazon are all locked in the account level reserve and no matter what i email the KYC with, they will not accept as proof that we are a UK based company, operating in the UK, shipping from the UK to only addresses in the UK, we do not even sell in the EU anymore since Brexit.
In the last 48 hours amazon have started adding 20% VAT on all of our orders with the following message at the top of the screen:
Marketplace facilitator order (legislation: UK VAT on eCommerce): Amazon is collecting VAT on this transaction.
This is a marketplace facilitator order and hence VAT is being collected and remitted to the tax authorities by Amazon. Your net proceeds will not include VAT for marketplace facilitator order. Please visit Tax regulations - help page for additional information.
In addition they are saying that VAT will be calculated back to the beginning of 2021 because we cannot prove we are VAT registered in the UK and paying the VAT on our sales. This amount of money would be astronomical for almost 3 years sales which we have already paid VAT on to the HMRC
I have sent them certificates from Companies House showing all directors and our registered office in the UK.
I have sent them a link to the HMRC VAT checker which shows our address in the UK.
Recent electricity bills showing active payments from our registered office in the UK and identification of all our directors.
recent tax returns submitted to HMRC showing we are actively paying tax.
If anybody is facing the same situation then please either reply to this discussion so that we can all try to figure out what could be causing them to think this and try to resolve the problem.
Performance Notification from Amazon:
Dear Selling partner,
After reviewing your company information recorded in the UK Companies House, we have concluded that there are indicators that your company is not established in the UK for VAT purposes. As a result, we have to ask you to provide additional evidence proving that your company is established in the UK in accordance with the UK VAT on eCommerce legislation.
If you fail to provide the documentary evidence listed below within 30 days, Amazon will conclude that you are not established in UK and will start collecting and remitting VAT on your B2C sales. You will also be required to pay the VAT amount to Amazon to account for the un-paid VAT. Meanwhile, you can continue selling on Amazon, but you will not be able to disburse any funds from your account. If we conclude based on the provided documentary evidence that your company is established in the UK, we will release your disbursements.
What documentary evidence do I have to provide and how?
Please email kyc-drtax-verification@amazon.co.uk with the following information:
1) Evidence that you are physically operating your business from your provided UK address.
If you operate a company:
2) An extract from the UK Companies House listing all directors of your UK company.
3) Documents confirming the identity and place of residence of every director listed in the extract.
4) Evidence of any employees residing in the UK.
If you are a sole trader (natural person):
2) Documents confirming the identity and place of residence of the sole trader.
Please note, once all the necessary documentation is provided, our review of your documents may take up to 14 days. We will also inform you in case any documents are missing.
What documents are accepted as proof for operating business?
A document addressed to the company or a director of the company at the UK business establishment address. One of the following:
a) UK council tax bill or business rates (for the current year); or
b) letter/bill from utility company (less than 3 months old, except for water bills, which must relate to the current charging period). Please note that mobile phone bills are not accepted.
Alternatively, if you are using a shared working space, please provide the license agreement in your name with the shared working space provider for a period of at least 6 months.
What documents are accepted as proof of identity for the directors (or the owner in case of sole trader)?
One of the following: full valid passport, national identity card, or full valid driving licence.
What documents are accepted as proof of residence for the directors (or the owner in case of sole trader)?
One of the following:
a) full UK photo card driving licence bearing residential address (if not already used as your proof of identity)
b) UK or foreign bank credit card or bank statement
c) UK mortgage statement
d) UK council tax bill (for the current year)
e) letter/bill from utility company. The letter you receive must confirm you receive a service from the company
f) electoral roll search
g) phone bill.
What documents are accepted as evidence of any employees residing in UK? What do I provide if I don’t have any employees in the UK?
Please note that directors are not considered employees. One of the following:
a) HMRC correspondence demonstrating the SP has registered with HMRC for PAYE; or
b) PAYE demand from HMRC, or a screenshot of the PAYE return submission, accompanied by payslip or P60 for the employee.
If you do not have any employees in the UK, please provide confirmation of this with your response.
How will Amazon calculate the VAT due on my account?
From 1 January 2021, Amazon is liable to collect and remit VAT on B2C sales from non-UK established SPs to B2C customers in UK under the UK VAT on e-Commerce legislation. If we conclude that you are not established in UK, your VAT liability will be calculated by assessing the sales you have made to B2C customers in the UK since 1 January 2021 for which VAT was not previously collected by Amazon where it is payable under this legislation.
I do not meet UK establishment requirements. How can I inform Amazon so that I can resolve my compliance position as soon as possible?
Please email kyc-drtax-verification@amazon.co.uk and provide confirmation of the country that you operate your company from. There is no requirement to provide any documentation where this is confirmed as being non-UK.
Why are you withholding funds on my account?
Your funds will be on hold in accordance with our policies:
• Funds withholding policy: https://sellercentral.amazon.com/help/hub/reference/9RA9LYBJ3QP27M6
• BSA: https://sellercentral-europe.amazon.com/help/hub/reference/G201190440
• APE/APUK Agreement: https://sellercentral-europe.amazon.com/help/hub/reference/G201190400
Thank you for selling on Amazon.
Sincerely,
Amazon Services Europe
Your disbursements have been suspended due to indicators of unmet UK business establishment requirements
Hi,
I have started this discussion for anybody that is facing the unbelievable situation that we find ourselves facing, On the 13th September 2023 we received the performance notification below that our disbursements had been suspended because of indicators of unmet UK business establishment requirements. At first i thought this would not be a major issue if i just sent Amazon the information they were asking for, however 2 months later our funds on Amazon are all locked in the account level reserve and no matter what i email the KYC with, they will not accept as proof that we are a UK based company, operating in the UK, shipping from the UK to only addresses in the UK, we do not even sell in the EU anymore since Brexit.
In the last 48 hours amazon have started adding 20% VAT on all of our orders with the following message at the top of the screen:
Marketplace facilitator order (legislation: UK VAT on eCommerce): Amazon is collecting VAT on this transaction.
This is a marketplace facilitator order and hence VAT is being collected and remitted to the tax authorities by Amazon. Your net proceeds will not include VAT for marketplace facilitator order. Please visit Tax regulations - help page for additional information.
In addition they are saying that VAT will be calculated back to the beginning of 2021 because we cannot prove we are VAT registered in the UK and paying the VAT on our sales. This amount of money would be astronomical for almost 3 years sales which we have already paid VAT on to the HMRC
I have sent them certificates from Companies House showing all directors and our registered office in the UK.
I have sent them a link to the HMRC VAT checker which shows our address in the UK.
Recent electricity bills showing active payments from our registered office in the UK and identification of all our directors.
recent tax returns submitted to HMRC showing we are actively paying tax.
If anybody is facing the same situation then please either reply to this discussion so that we can all try to figure out what could be causing them to think this and try to resolve the problem.
Performance Notification from Amazon:
Dear Selling partner,
After reviewing your company information recorded in the UK Companies House, we have concluded that there are indicators that your company is not established in the UK for VAT purposes. As a result, we have to ask you to provide additional evidence proving that your company is established in the UK in accordance with the UK VAT on eCommerce legislation.
If you fail to provide the documentary evidence listed below within 30 days, Amazon will conclude that you are not established in UK and will start collecting and remitting VAT on your B2C sales. You will also be required to pay the VAT amount to Amazon to account for the un-paid VAT. Meanwhile, you can continue selling on Amazon, but you will not be able to disburse any funds from your account. If we conclude based on the provided documentary evidence that your company is established in the UK, we will release your disbursements.
What documentary evidence do I have to provide and how?
Please email kyc-drtax-verification@amazon.co.uk with the following information:
1) Evidence that you are physically operating your business from your provided UK address.
If you operate a company:
2) An extract from the UK Companies House listing all directors of your UK company.
3) Documents confirming the identity and place of residence of every director listed in the extract.
4) Evidence of any employees residing in the UK.
If you are a sole trader (natural person):
2) Documents confirming the identity and place of residence of the sole trader.
Please note, once all the necessary documentation is provided, our review of your documents may take up to 14 days. We will also inform you in case any documents are missing.
What documents are accepted as proof for operating business?
A document addressed to the company or a director of the company at the UK business establishment address. One of the following:
a) UK council tax bill or business rates (for the current year); or
b) letter/bill from utility company (less than 3 months old, except for water bills, which must relate to the current charging period). Please note that mobile phone bills are not accepted.
Alternatively, if you are using a shared working space, please provide the license agreement in your name with the shared working space provider for a period of at least 6 months.
What documents are accepted as proof of identity for the directors (or the owner in case of sole trader)?
One of the following: full valid passport, national identity card, or full valid driving licence.
What documents are accepted as proof of residence for the directors (or the owner in case of sole trader)?
One of the following:
a) full UK photo card driving licence bearing residential address (if not already used as your proof of identity)
b) UK or foreign bank credit card or bank statement
c) UK mortgage statement
d) UK council tax bill (for the current year)
e) letter/bill from utility company. The letter you receive must confirm you receive a service from the company
f) electoral roll search
g) phone bill.
What documents are accepted as evidence of any employees residing in UK? What do I provide if I don’t have any employees in the UK?
Please note that directors are not considered employees. One of the following:
a) HMRC correspondence demonstrating the SP has registered with HMRC for PAYE; or
b) PAYE demand from HMRC, or a screenshot of the PAYE return submission, accompanied by payslip or P60 for the employee.
If you do not have any employees in the UK, please provide confirmation of this with your response.
How will Amazon calculate the VAT due on my account?
From 1 January 2021, Amazon is liable to collect and remit VAT on B2C sales from non-UK established SPs to B2C customers in UK under the UK VAT on e-Commerce legislation. If we conclude that you are not established in UK, your VAT liability will be calculated by assessing the sales you have made to B2C customers in the UK since 1 January 2021 for which VAT was not previously collected by Amazon where it is payable under this legislation.
I do not meet UK establishment requirements. How can I inform Amazon so that I can resolve my compliance position as soon as possible?
Please email kyc-drtax-verification@amazon.co.uk and provide confirmation of the country that you operate your company from. There is no requirement to provide any documentation where this is confirmed as being non-UK.
Why are you withholding funds on my account?
Your funds will be on hold in accordance with our policies:
• Funds withholding policy: https://sellercentral.amazon.com/help/hub/reference/9RA9LYBJ3QP27M6
• BSA: https://sellercentral-europe.amazon.com/help/hub/reference/G201190440
• APE/APUK Agreement: https://sellercentral-europe.amazon.com/help/hub/reference/G201190400
Thank you for selling on Amazon.
Sincerely,
Amazon Services Europe
121 replies
Seller_2nxU83ZFxUoNH
Same situation since Sept 4. UK Ltd company (already VAT registered) with foreign company director. Received VAT liability amount Sept 20. Received following email on Oct 25:
Hello,
We are still reviewing your account. We will send you an email when we finish the review.
Merchant Debt Team
Amazon.co.uk
I am at a loss how to get this sorted. Ready and willing to pay the liability again and get a refund from HMRC but how can I run a business with zero cash flow?
Seller_Do0HSWUUvOQXn
Greetings from Germany,
hundrets of accounts got their balance freezed by 29/30.10.
All same satndard text.
Zero progress.
Seller_FKMWmEGEgIXny
Hello,
For anyone reading this message, I have found that there seems to be two different issues here.
The first which our company is suffering from is that we are an entirely UK based company, and everything operates from a UK office and VAT is fully up to date BUT one of our directors residency is in the EU. I have had confirmation after Amazon escalation that this is why the KYC cannot determine that we are a UK based company and are going to charge us full 20% VAT on all sales since January 2021. An astronomical amount of VAT which will bankrupt the business without a doubt and be impossible to pay. The second problem with this is that we have already paid VAT on the UK VAT margin scheme for used goods so we can only claim back a fraction of whatever amazon is trying to charge us and this will take months, so the business will inevitably go into liquidation now. If anyone if facing this same situation for a small technicality of having a foreign director but everything else in the company is entirely UK based, then please come forward because we may need to join forces to get amazon to re-think this policy to save our companies. Alternatively, if anybody has had a solution to this situation, can you please explain how you solved this.
The second problem people are facing I know is fixable. If you are entirely UK based with no foreign directors, then your issue probably lies with the UK VAT checker. If you google this and put your UK VAT number in, it will show the registered address with HMRC which may be different to companies house. You need to make sure get this changed by asking your accountant or through the UK government gateway portal so that it matches exactly your registered business address with Amazon. You then need to email the KYC team to confirm the changes and they should unlock your funds.
I hope this helps but please come forward because we cannot let Amazon cripple hundreds of businesses when we have done nothing wrong.
Seller_mBzMy5fGvPFrw
Can't really help you but just want to say I feel for you and I hope you manage to find a resolution
Seller_w457tVgzoqyvT
Hi
I wanted to share a similar situation I'm facing with my Amazon in the hope that we might find a solution together. Here's a quick rundown:
1. I run an LLP UK company.
2. Due to non-UK residency, we used a virtual address for registration.
3. Our accountant, AVASK, registered our UK VAT using their address, leading HMRC to classify us as a non-UK business for VAT purposes.
4. Amazon, unaware of this, is currently withholding funds across all marketplaces (UK, EU, and US).
Despite presenting evidence of VAT payments to HMRC, Amazon insists on retroactively withholding VAT.
It's been a frustrating experience, and I'm reaching out to see if anyone else has dealt with a similar situation. Any advice or shared experiences would be greatly appreciated.
Thanks,
Seller_hgWr16CS93TNM
Hi,
I have just had an email like this.
We are a UK based company but we have only just started and have not reached the VAT threshold, so don't have a VAT number yet.
So i am really confused how we can comply with this.
Any Advice
George
Seller_wHXwgq2yOpE6W
going through this now, got a load of stock to go into fba today via ups, think I may hold onto it and cancel shipment, until it gets sorted out,
Seller_wWPx75JkvJ6vg
We've had this email too over Christmas.
Requesting sensitive information like copies of passports, bank statements and more be emailed to them is scandalous in my opinion. Use something secure!
Can't ask any questions via email, as you just an unhelpful cut and paste template response.
It's really frustrating - Amazon have all the necessary information - they just need to look at it and apply some common sense.
