how to get exempt from vat.
i am new to amazon as seller. i have registered as a soletrader. everytime i sell something amazon charges me vat 20% as i am totally new havent even generated a penny yet.
my question is how can i get exempt from vat?
and how can i apply?
docs i have got for my business is my utr number from hmrc.
thank you
how to get exempt from vat.
i am new to amazon as seller. i have registered as a soletrader. everytime i sell something amazon charges me vat 20% as i am totally new havent even generated a penny yet.
my question is how can i get exempt from vat?
and how can i apply?
docs i have got for my business is my utr number from hmrc.
thank you
18 replies
Seller_ZJhFeE3tNKzfh
You can't. Since August 1st Amazon have charged UK VAT on all selling fees.
Seller_zQVYrNgHhEJ9D
You can only claim it back if you are VAT registered.
If you go into a cafe and buy a coffee, you are charged VAT No difference
Seller_idCSjD35wINVo
It seems you have gone into business without thoroughly researching business policies and legal requirements from both Amazon and HMRC. This could mean a very rough time ahead and a potential financial loss unless you learn very quick.
Seller_tRuvBEHDedp4q
You cannot exempt yourself from paying VAT
Pre August Amazon were invoicing from Luxembourg and a loophole meant you could be exempted from having VAT added. But this loophole has now been closed as since August Amazon are now invoicing from UK office.
Everyone pays VAT - individuals and businesses alike - its basically added to any goods or service you buy in. Take a look at any supplier invoice, utility bill, shipping etc.
Only a few items are exempted from having VAT added (for example children's clothes)
As a new seller you wont yet be liable to be VAT registered yourself. When your turnover reaches £90k you will have to register.
As a non VAT registered business you will have to pay any VAT added by the supplier of the goods or service
When you become VAT registered you still have to pay any VAT added, but then you can claim it back - and you must also charge it and add it to any goods you sell. You collect the VAT for HMRC and pay the difference between what you paid out and what you charged.
So (for simplicity I am ignoring fees) when not VAT registered if you bought in goods at £100. the supplier will add £20 VAT so you pay them £120. You sell the goods at £180 and have made £60 profit.
When VAT registered you still pay £120 to the supplier. Then on your VAT return (usually done every 3 months) you claim £20. But you must charge VAT. So if you kept your prices the same that £180 is now VAT inclusive so it is actually £150 for goods and £30 VAT collected. You then send HMRC £10 (the difference between what you collected (£30) and what you paid out (£20)) - and so now your profit is £180 (money taken) - £120 (original cost) - £10 (VAT sent to HMRC) = £50
Seller_0JfEWwUXi6ie9
You can choose to register for VAT if your turnover is less than £90,000 ('voluntary registration').
Seller_K8edOfPu9HEmN
Not quite true. VAT is a business expense like any other and can be claimed for just like any other overhead expense against profit at the year end.
Seller_DfMOm9tgJKAex
your not exempt from vat, vat has to be paid on all required items, many items you buy in shops have VAT on them you don't get this back unless you are vat registered
Seller_kjXDHcJtTU3MN
>> "everytime i sell something amazon charges me vat 20% as i am totally new havent even generated a penny yet."
You might want to re-visit your line above ...you've said you're selling things but haven't generated a penny. :-)
