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IM VAT exempt yet im still getting charged
So after speaking to seller support theyve said i should be able to claim back my VAT, ive already proven im exempt & theyve accepted this so i havent been getting charged the 20% for some time. i see theyve recently changed it so even if your exempt you still get charged.
After speaking to support they said i should be able to claim it back "through your normal VAT return process" but i dont have normal VAT return process as ive been exempt for some time. Been going through my tax document library and there is a vast amount of VAT charged so how do i go about claiming this back?
support appriciated
31 replies
Seller_Tx4EJVPz6DqQX
The article below is the one you need to read. From 1st August VAT is charged on all seller fees according to local rules. There is no longer an exempt status for UK sellers, all fees are subject to HMRC VAT rules exactly the same as any other UK VAT registered business.
1 August 2024
Update to Amazon UK and EU agreements and VAT treatment now effective
As previously communicated, effective August 1, 2024, Selling on Amazon, Fulfilment by Amazon, and all other services previously supplied by Amazon Services Europe S.à r.l. ("ASE") will be supplied by Amazon EU S.à r.l. ("AEU").
All agreements, policies, terms and conditions that previously referred to ASE, including Amazon Payments agreements, will now refer to AEU. Please consider any reference to ASE as a reference to AEU. Additionally, all invoices issued by Amazon will be issued by AEU, instead of ASE.
If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply and VAT will be charged on your Amazon fees. In the majority of cases, we expect that you will be able to recover this VAT through your normal VAT return process.
We recommend that you contact your tax advisor for more information on recovering VAT as per your country of establishment's local regulation.
If your company is not established in the countries listed above, you will be invoiced by the AEU head office in Luxembourg, and there will be no change to how VAT is applied on Amazon fees.
Note: This change doesn't impact your account access, listings, product pricing, customer reviews, selling services or the price of services.
For more information, go to Update to Amazon UK and EU seller services entity and VAT treatment.
Seller_mS10UjVYuuGor
There is no such thing as VAT exempt. It was a term thrown around on Amazon only. Did any supposed VAT exemption ever get you you VAT free goods from your suppliers or even your local hardware store? No, it only ever applied to Amazon seller fees (not adverts)... the term is nonsense.
Amazon used to try to implement a reverse charge mechanism, post Brexit HMRC told Amazon it was twoddle and as they were charging fees for services provided in the UK then VAT would be applied and collected. Amazon rolled over, had it's tummy tickled and soon realised what it was doing was nonsense so agreed a date with HMRC to start passing the VAT onto sellers for the fees it charged them. It happened in the 1st September.
Some goods/services are zero rated such as children's shoes, some personal hygiene products and most insurance but that shouldn't be confused with exempt.
If your business turns over £90K or more it will have to register for VAT automatically. If turnover is under £90K the business owner should investigate if it would benefit them to register anyway. A business with a turnover of £70K paying Amazon £30K of that in adverts and fees may well benefit from registering anyway, their accountant can advise. If you're making a loss but investing in your business in terms of stock, machinery, advertising etc you might even get money back from HMRC each quarter if registering early.
If you wish to reclaim VAT already paid you'll need to be registered for VAT. How far you can go back will depend upon when you start/started paying the VAT on your sales, you can't have it both ways, however there maybe some negotiation regarding stock held but not yet sold. Your accountant can advise.
Seller_l9DWGFvAaJQ2I
You are either VAT registered or you are not. There's no in-between.
If you are then, you claim back VAT people charge you, and you pay HMRC VAT on the stuff you sell.
If you are not then you do not pay HMRC, as you not charging VAT on your sales to your customers. You cannot claim back from supplier purchases and services (like Amazon fees).
Why not? Because you are not VAT registered
What your grey area seems to be is what happens to VAT figures when you are not registered. On products or services you buy, you still pay it, you just can't claim it back.
You are expecting the VAT to simply vanish and you not pay it at all. That's not how it works. You pay it, but can't claim it back.
Everyone else's reply on here says pretty much the same thing, just phrased slightly different.
In answer to your question ' Been going through my tax document library and there is a vast amount of VAT charged so how do i go about claiming this back?'
You cannot claim this back unless you are VAT registered! And until then, you pay it.
However, if you do decide to get registered you can claim VAT back on most eligible things for a few years. Tidy.
Seller_kKOdRZuhZIPPS
From the 1st August, all sellers are charged VAT on fees.
Those on the standard rate VAT scheme can recover it on their VAT return.
Those on the flat rate scheme can't claim it back.
Those who are not VAT registered can't claim it back.
The term 'exempt' causes confusion because Amazon just meant the seller was exempt from being charged VAT on their fees. This was only because Amazon fees were invoiced from Luxemburg until the 1st August. I assume you've been paying VAT on stock, supplies, packaging etc? So you are not 'VAT exempt' just were 'exempt' from paying VAT on Amazon Seller Fees. Now they are invoiced from the UK, they are treated like any other expense as far as VAT is concerned.
It means something entirely different with HMRC - they mean a particular product or service is exempt (not a person)
Seller_DfMOm9tgJKAex
you are not 'exempt'. it just in the past amazon was not classed as operating from the UK so you were able to apply not to be charge the VAT if you were not registered
they are now classed as operating from the UK so you have to pay VAT just like you do on the thing you buy in shops.. thats the law!!
now if you are VAT registered you can claim the vat back, otherwise you can not
Seller_ae51e0CJoHqCX
Hopefully you have now grasp[ed the situation.
To summerise if you are registered for VAT you have to pay VAT on all of your sales but you can claim VAT back that you have paid on costs that have a VAT element ie mainly your purchases.
Up until the end of July, there was no VAT applied to selling fees so nothing to claim back if you are VAT registered. Amazon started applying VAT to fees which means that they pass this charge onto the sellers. the sellers if VAT registered can claim this back so if you are VAT registered you now get this additional charge back.
If you are not VAT registered then you have nothing to claim back.
You still don't pay the 20 percent on your selling price ie turnover unlike every VAT registered business (unless you are flat rated)
As a non registered vat business you still have an advantage but this advantage has been reduced and I demonstrated a calculation of this on another post and it will cost you around 3 percent extra in your turnover. Providing you make a decent margin and selling at profit, there is still no advantage to being VAT registered until you hit the turnover level. The only thing that has happened here is that your advantage has now been reduced. You still have an advantage against vat registered businesses albeit a smaller one.
As for going back and claiming etc, there truly is no point as you will only be able to go back and claim at the point you were registered but your vat return will be more as you will have to pay 20 percent of your turnover for that period. You will be worse off.
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