Amazing VAT mail I got from Amazon. I am very worried.
Hello everyone. We have been selling on amazon UK since about 2021.
We live in Turkey, but we have a company in UK. Since 2021, we have filled our tax returns with our accountant and paid our taxes regularly.
But I just got an e-mail:
Dear Selling partner,
From 1 September 2023 onward, Amazon started collecting and remitting VAT on your B2C sales because we have concluded that your business is not considered as established in the UK for VAT purposes. UK VAT eCommerce legislation requires Amazon to collect and remit UK VAT on your B2C supplies delivered within the UK by non-UK established businesses.
This legislation was originally implemented on 1 January 2021, and we are in the process of assessing your UK VAT owed since then. We expect this process to take up to 14 days, and will contact you with the result of our assessment. You can continue selling on Amazon, but you will not be able to disburse any funds from your account, until any UK VAT owed is paid to Amazon. You will receive more instructions on how to settle the payment in further communication.
Why did this happen?
We have taken this measure because according to HMRC records, the address associated with your VAT Registration Number is HM REVENUE AND CUSTOMS OFFICES, RUBY PLACE, ABERDEEN, AB10 1QZ - the default address HMRC uses for registrations where the business is not established in UK for VAT purposes.
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In other words, amazon would deduct the tax from the sales of amazon sellers who do not reside in the UK but have a company in the UK and pay it to HMRC.
We were unaware of this law, we paid our own taxes for 3 years.
But amazon says, we just realized this situation and we will calculate the tax from your sales since 2021 and pay HMRC :)
Any idea what this means?
We are seriously concerned.
Amazing VAT mail I got from Amazon. I am very worried.
Hello everyone. We have been selling on amazon UK since about 2021.
We live in Turkey, but we have a company in UK. Since 2021, we have filled our tax returns with our accountant and paid our taxes regularly.
But I just got an e-mail:
Dear Selling partner,
From 1 September 2023 onward, Amazon started collecting and remitting VAT on your B2C sales because we have concluded that your business is not considered as established in the UK for VAT purposes. UK VAT eCommerce legislation requires Amazon to collect and remit UK VAT on your B2C supplies delivered within the UK by non-UK established businesses.
This legislation was originally implemented on 1 January 2021, and we are in the process of assessing your UK VAT owed since then. We expect this process to take up to 14 days, and will contact you with the result of our assessment. You can continue selling on Amazon, but you will not be able to disburse any funds from your account, until any UK VAT owed is paid to Amazon. You will receive more instructions on how to settle the payment in further communication.
Why did this happen?
We have taken this measure because according to HMRC records, the address associated with your VAT Registration Number is HM REVENUE AND CUSTOMS OFFICES, RUBY PLACE, ABERDEEN, AB10 1QZ - the default address HMRC uses for registrations where the business is not established in UK for VAT purposes.
*************************************************************************
In other words, amazon would deduct the tax from the sales of amazon sellers who do not reside in the UK but have a company in the UK and pay it to HMRC.
We were unaware of this law, we paid our own taxes for 3 years.
But amazon says, we just realized this situation and we will calculate the tax from your sales since 2021 and pay HMRC :)
Any idea what this means?
We are seriously concerned.
46 replies
Seller_ZVAz3d5lZuGid
If you are not resident in UK and store your goods in UK for FBA, then, even if you have a registered UK address, you are considered as a NETP (look it up !), and need to be VAT registered.
Here are the criteria to meet the requirement for the UK business address:
'A UK establishment exists if either the:
place where essential management decisions are made and the business’s central administration is carried out is in the UK
business has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK
We would normally consider a company which is incorporated in the UK to have an establishment in the UK as long as it’s able to receive business supplies at its registered office.'
I assume that HMRC in Aberdeen does not meet those criteria.
I think you are right to be seriously concerned - be prepared for a large VAT bill. This is something they have been tightening up on over past few months.
Seller_RlZVPg3d6ZUGP
Assuming you have a record of all the vat paid to hmrc since 2021 you should be able to prove you don't owe anything further. There was a massive long thread on this but not sure I can find it for you now the forum has changed over
Seller_ZQyopdiwkUHOZ
This is a weird one. Even if you did owe the VAT, I don't see why you'd owe it to Amazon. Surely you'd owe it to HMRC directly?
So why would Amazon be asking you to pay it to them?
Have you verified that the email is authentic?
Seller_Vetnonq7bfqls
Get your accountant to speak to HMRC to clarify the situation specifically for your business. If they do claim you need to allow Amazon to collect them you should be able to reclaim what you have already paid.
However this wont help in the short term if Amazon does withhold funds.
Seller_U5pKz6eLHpitr
No need to worry. They have said, they ve collected VAT on your behalf.. Most probably, they are going to re-calculate smthg was missing or not. In case, they have held your treasure, if needed to owe more or less.. Do not think its NETPs issue... sıkıntı yok, isine odaklan :)
Seller_vtSzvxtW9StxE
"We were unaware of this law, we paid our own taxes for 3 years."
I assume thats Turkish taxes you are talking about and not UK VAT.
And if that is the case and also if you are UK FBA seller, as JillyB said you need to be VAT registered and HMRC may ask you to pay past VAT.
If you're UK VAT registered, thn check your VAT account and see what address you've got there.
As otheres said, I am not sure how and if amazon can legally collect this VAT but if you've been storing in UK FBA and not VAT registered, there is VAT you didnt pay to HMRC and that needs to be sorted.
btw, have you contacted seller support?, also I assum you've checked the email adress for this message.
Seller_pmt21FArrYJaK
Hello, I am in a similar situation as the original poster. I have a UK LTD company but the directors and shareholders are not UK residents.
I understand Amazon will now be collecting VAT on our B2C sales and remitting it to HMRC,and we understand and accept the fact that from Sept. 1, Amazon VAT will be collected and we will have to make a recovery from HMRC for puchased products.
We have been filing VAT returns and paying taxes properly through our accountant until now and we are VAT registred.
I think that Amazon also knows that a distributor does not care about your problems with Amazon because you have to pay them on credit terms.If we will lose more days I think that thid will lead to the closure of the company because our suppliers will not belive us.
For example, I submitted declarations until the last quarter that ended on 31.07 and I paid all VAT that we had to be up to date.
I could agree that Amazon block my money for the month of August.
He has access to all the documents and can calculate that we have x £ VAT to pay.
I would understand if Amazon keeps the whole amount(august 2023) and then doesn't release the amount until we come with proof that we paid to HMRC for the last month(August).But the rest of ammount blocked I think that should be released...
Then, starting with September 1, he collects VAT from us and sends it to HMRC.
Could someone from Amazon please advise on any documents we can provide to prove tax compliance, so that the verification process can be expedited?
I already sent all VAT RETUNRS that we completed to the VAT team and SellerSupport and Director Management and no answer...
I'm sure that everyone in this situation sends dozens of cases and I think that Amazon should have prepared for this with staff to solve it as quickly as possible.
Seller_OMHyMbXkAXKeV
Same here, please keep us posted. Have you had any follow-up for possibly total amount due? Thanks.
