Being charged VAT
Dear All
I have a genuine problem understanding this issue.
Please see my screenshot.
I should have received £37.27 as I normally get £37.27 after sales of this unit.
However, on this occasion I have received only £28.94.
It is to do something with sales to Channel Islands. I do not understand this at all, I genuinely don't. I receive a script, copy and paste from the entire amazon website from seller support despite me begging that they keep their response jargon free.
Now I have raised this earlier but honest, I have not understood why I am paying vat. I am actually out of pocket because of sales to Channel Islands. I am NOT a vat payer. Why am I paying VAT to amazon, if it were a case.
@Ezra_Amazon @Julia_Amazon @Sakura_Amazon_ @Sarah_Amzn @Simon_Amazon @Spencer_Amazon @Winston_Amazon
Being charged VAT
Dear All
I have a genuine problem understanding this issue.
Please see my screenshot.
I should have received £37.27 as I normally get £37.27 after sales of this unit.
However, on this occasion I have received only £28.94.
It is to do something with sales to Channel Islands. I do not understand this at all, I genuinely don't. I receive a script, copy and paste from the entire amazon website from seller support despite me begging that they keep their response jargon free.
Now I have raised this earlier but honest, I have not understood why I am paying vat. I am actually out of pocket because of sales to Channel Islands. I am NOT a vat payer. Why am I paying VAT to amazon, if it were a case.
@Ezra_Amazon @Julia_Amazon @Sakura_Amazon_ @Sarah_Amzn @Simon_Amazon @Spencer_Amazon @Winston_Amazon
0 replies
Seller_RlZVPg3d6ZUGP
Its a known problem with sales to the channel islands unfortunately
Seller_MT8rt0A2OpbCx
Amazon assume (wrongly where not VAT registered) there is VAT included in the price and deduct it for sales outside the U.K., where that would be correct for VAT registered sellers.
Seller_7pTs15IYXmTOB
Many thanks
Is there a solution to this? It is so sad that I receive £28 after a £59.99 sale.
@Ezra_Amazon @Julia_Amazon @Sakura_Amazon_ @Sarah_Amzn @Simon_Amazon @Spencer_Amazon @Winston_Amazon
Seller_7pTs15IYXmTOB
Many thanks all
I am a small seller. So I cannot register for vat.
I have raised this with seller support and thanks, I shall pursue this but if only they could give me step by step instructions how to un-vatify myself, would be great! What paper work would they like to see and where do I submit?
@Ezra_Amazon @Julia_Amazon @Sakura_Amazon_ @Sarah_Amzn @Simon_Amazon @Spencer_Amazon @Winston_Amazon
Seller_MT8rt0A2OpbCx
You may not want to, but, just for information, you can register if your sales are below the threshold. If you are above, you have to.
Sarah_Amzn
Hello @Seller_7pTs15IYXmTOB, @Seller_RlZVPg3d6ZUGP, @Seller_MT8rt0A2OpbCx, @Seller_76AUwmqvSyRIM
I presented your concerns to the appropriate team including the example shared from @Seller_7pTs15IYXmTOB and I received the following answer:
"There's public guidance in HP https://sellercentral-europe.amazon.com/gc/vat-education/uk-voec?ref=VATed_ukvoeclp_eu&ref_=xx_swlang_head_xx&mons_sel_locale=en_GB&languageSwitched=1
Seller should follow the guidance to set their price.
In order to comply with the new VAT regulations, Amazon will calculate and remit the applicable VAT due on your sales that meet the above qualifications. UK Marketplace (.co.uk)
Prices listed on the UK marketplace will be treated as inclusive of UK VAT. Amazon will calculate the UK VAT due on your sale and withhold this from the amount collected from the customer.
For shipments fulfilled from outside of the UK, Amazon will calculate the VAT exclusive value of the customer order to determine if the shipment value is above or below the threshold of £135. If the value is at or below this threshold, Amazon will calculate the UK VAT payable and withhold this from the amount collected from the customer. If the value exceeds £135, Amazon will not withhold any amount from the customer."
To escalate this matter further I kindly request your assistance. Could you please help me identify the discrepancy between the stated process and the actual implementation so I can get back with an answer to the partner team?
Thank you!
Kind regards,
Sarah.
Seller_saK5Ah2SaNYjL
You can stop MFN/FBM sales to the Channel Islands in your shipping templates (we have). Not much you can do about FBA.
Seller_tRuvBEHDedp4q
It is my belief that Amazon have been misinterpreting these VAT rules incorrectly but getting them to change their procedures has been nigh on impossible. I have written to my MP on the issue but for now I have had to suspend all international orders (I only do FBM so it was easy for me).
The rules are quite clear in my opinion. Yes, Amazon is now responsible for collecting and remitting any VAT due for EU orders (I include Channel Islands in this) - but the important thing is THEY DO NOT TAKE INTO ACCOUNT THE VAT STATUS OF THE SELLER.
The rules specifically say that there should be no impact on profit to the seller - but the way Amazon have implemented them means there is an impact and how Amazon have done it is totally different from the way eBay and other similar marketplaces have implemented them. Amazon should remove any UK VAT element from the sale price, then add on the VAT for the country where order is being sent and this is what the customer should pay. If this was implemented correctly then there would be no impact on profit to any seller whether VAT registered or not and selling to any EU country.
Amazon say you should set price to include all relevant VAT - but when its an international EU sale on the UK site this is impossible with how they have implemented it.
Let take an example (for simplicity I am not considering fees only VAT)
A small business VAT registered seller advertises something at £12 on their own website. If they sold it to a UK customer they would take £10 and pass on £2 to HMRC. If they sold it internationally then they could remove the VAT (as exported goods do not attract VAT) and the customer pays £10 and there is nothing to send HMRC.. In both cases the seller gets £10.
Now consider the situation where the seller lists the item on an online UK marketplace site and someone in the EU (whose VAT rate is 25%) buys it.
On eBay (and other marketplaces) , they remove the UK VAT element (£2) and disburse £10 to the seller. The customer is charged £10+25% VAT=£12.50 and eBay send £2.50 to the relevant tax authority for that country. Seller still has exact same profit.
On Amazon, they remove VAT at 25% (£2.40), disburse the seller £9.60, charge the customer £9.60+25% VAT=£12 and send £2.40 to the relevant tax authority. Seller has now made 40p less but customer is paying the same price as originally advertised on the UK site (i.e. £12)
If the seller was not VAT registered and sells something on an online marketplace at £10 (as they have no need to add VAT) to someone in the EU
On eBay, they recognise seller is not VAT registered so there is no UK VAT element to remove. They disburse seller £10 but charge the buyer £10+25%=£12.50 and send £2.50 to the relevant tax authority.
On Amazon, they have no such recognition of VAT status and apply the same rules as before. So they remove VAT at 25% (£2), seller is disbursed £8, buyer pays £8+25% = £10. Seller is now down £2 on their profit.
Basically its all to do with Amazon not wanting or able to recalculate prices shown to customer on-the-fly. On Amazon, the customer will always see the exact same price no matter where they are from when buying from the UK site - whereas on eBay the price is recalculated on-the-fly taking into account VAT status of seller and VAT rate of country they are from.
Interestingly, the VAT Amazon calculate as should be sent to the relevant EU tax authority will also always be less than what other marketplaces would have sent. In my examples above other marketplaces would have sent £2.50, whereas Amazon would have sent £2.40 for a VAT registered seller and £2 for a non VAT registered seller. There nothing wrong with the calculation - but if seller profit was kept then the tax authority would be better off.
