Luca this is SUCH a clear explanation of a confusing topic for newbies and has helped me on many of an occasion already. Thank you for making this video dude!!
Hey buddy, YOU ARE THE MAN!!!!! After days of research I become more confused that I was. Finally I found this video, it cleared up everything in 10 min. Thanks 👍👍👍👍👍
This is the first video explaining VAT where I actually understand it 😂 I’ve been using FBA calculator and didn’t know 20% VAT comes off the profit... big difference that most RUclips channels do not advise! 🙈
The UK VAT threshold is mis-quoted in this video for tax year 2020/21 (and this video was released May 2020) the threshold is actually £85K not £80K, important detail to note.
Thanks for that information. If i buy goods from China for dropshipping to my customer in uk(my company is uk registered but not VAT registered ) via eBay should the Chinese company charge me VAT and am I the “consumer”? The advice from HMRC seems to make things so obscure and you make it so clear. And if I register for VAT my accountancy firm (OSOME) will charge me a lot more and I haven’t even started selling yet!
Luca, unless it's required what is the point of registering for VAT then? According to your video, you always end up with less profit dollar in your pocket (3.2 vs 3.84) if registered [not to mention the headache of VAT compliance]
6:55 you explain that you can return a portion of your sales VAT based on your expenses. 9:13 you do not take into consideration that you will return a portion of your VAT based on your expenses VAT. Why?
one thing i don't understand; I'm downloading the merchant VAT invoice and on it it's showing there's 0% VAT for the seller fees. So I can't claim them back?
I registered myself as VAT exempted and guest what? They charged me Vat in my sell. I have contacted amazon through the help button, thankfully they are really good at replying speed. Great video, really helpful!!
Awesome, glad the video was helpful! I'm afraid I only offer 1-1 support to our Academy members. You can find more info here: www.amazonbrandacademy.com
Great video, Could you please answer my question based on your experience in selling on Amazon as i am a Uk resident and my limited company is new? Is it better to register in the VAT from the beginning or not?
This guy is a legend usefull info just curious do you add the vat after you added all amz fees shipping and product cost or do you add vat after you add your margins shipping cost and product cost because 20 percent looks different on each number 20 percent added to 15 will look different from 20’percent added to 20.00 ?
With the 7.5% FRS, you cannot reclaim any VAT paid on business expenses (input VAT), however only need to pay HMRC 7.5% VAT and you can keep the remaining 12.5% collected on the sale.
how do you explain to this sent by Amazon: "Yes, we see that you are VAT exempted and are not supposed to be charged VAT on orders and the services we provide you. However, the orders which have alerts saying “MarketPlace Facilitator” are the one’s wherein all the sellers (may it be VAT registered or VAT Exempted) have to pay VAT as per the legislation. "
nice explanation but Amazon itself ask to be VAT registration if your sales exceed £15k. What about this OSS scheme and force for vat registration after £15k of sales?
Do you know most sellers in UK priced their item at a very low price as the price point usually will be negative profit after paying the VAT! Don't they aware they will need to pay VAT charges?
If your business is registered outside of the UK, then no the threshold will not apply to you. You might want to look into setting up a UK LTD company so worth speaking to an accountant.
Hi Luca, Great, consice video on VAT, i have question Are we reponsible for paying VAT on the sales made through amazon or Its already Amazon who collects on our behalf and submit to HMRC Thanks
Hey Luca, thanks for your explanations, your videos are always very clear! When buying goods on platforms like Alibaba, they are now adding a 20% VAT on the final price (apparently collected and remitted to the UK tax authorities - unless you provide a VAT registration number). First question: is this VAT charged only once then by Alibaba and not during custom clearance? Second question: As a non-VAT registered sole trader, would you then have to anyway pay for his upfront and charge indirectly your customers to recover for this expense? (i.e in your example, the revenue remains for both at £10 for the sale revenue) ?
VAT should only be charged once by Alibaba and then should not be charged again by UK customs, provided all the paperwork showing the VAT has already been paid, is present on the shipment. If UK customs charge you a second time, you can send them evidence that you have already paid it and they will refund you. Yes, that is correct! VAT on the goods (input vat) is an expense for you as a non VAT registered business but because you don't have to charge VAT / collect any VAT (output vat) on your sale price, you recoup it there.
Great info, thank you! I'm an estate photographer providing digital image downloads. I know I will not surpass the £85,000 threshold, so how would I display my pricing? Some online pricing states "VAT Included" so the buyers knows they might be able to deducted the VAT.
Great video about VAT! People say that you have more chances to get responses and good prices from suppliers if you are VAT registered than if you ar not. Is it true?
Hey, I do not sell sell big brand products on Amazon (Wholesale) so It's not my area of expertise I'm afraid! However I wouldn't be surprised if that were true, as being a VAT registered company tends to signify that you have a larger revenue and hence are a larger company. If you're a larger company I would assume wholesale suppliers would be more willing to work with you. Hope that helps!
Luca this is such a great video. Thank you for clearing my VAT concepts. One thing I'm still wanna ask that on 12 pounds, the VAT should be 2.4 pounds as 20% of sale price?
All B2C sale prices in the UK, including on Amazon, always include VAT already. So a £12 (inc VAT) sale price is actually a £10 (exc VAT) sale price + £2 VAT.
Great Vid! 😄👍 I've watched a few videos, they say you must register FBA as a 'Limited Company'... could I not register as a 'Sole Trader' or is it just best to jump straight in as a VAT registered company?
Thanks! You can on Amazon as either a sole trader or LTD company and if you’re based in the UK, you won’t need to be register for VAT until your turnover is above £85K per annum. Operating as a LTD is more tax efficient, that’s why people tend to recommend it over sole trader
Hi Luca, great video. Would really appreciate a response to this. I have been selling on amazon uk for over a year now. I'm Vat registered and have vat services on Amazon. I have access to my AVTR and amazon say that all vat is amazon responsibility to collect and remit. However I'm just wondering where do do the tax authorities go to find this remitted vat? I'm being checked for vat compliance at the moment and I know Amazon have collected the vat i just don't know where to tell them to find the payments. All the best, Max
Hi! Hope you can answer: If I am a sole trader and contact HMRC for proof that I sell on Amazon for the money back (Luxembourg tax), would I need to provide all past invoices and receipts etc to them? Thanks!
Luca, thanks for this. Firstly, Im registered for VAT (voluntary) for flat rate scheme so how would that affect my business? Also, I am registered but for mu music business (not e-commerce). If I go exempt on Alibiba for example do I have to charge VAT on my amazon stock? Thanks.
Hey, yeah it is possible to register for the 7.5% FRS. If you do so you will only have to pay HMRC 7.5% VAT on sales but will not be able to claim back any input VAT (VAT spend on business expenses). You can find out more here: www.gov.uk/vat-flat-rate-scheme
Hi Luca, I have registered UK LTD company but I am a USA citizen and reside in the USA. I sell goods on Amazon UK which are imported from China. Do I need to apply for VAT before reaching the threshold?
Hi Luca. I have a question I was hoping you might be able to answer about paying VAT on Amazon Advertising expenses when you are VAT registered. I have been asking Amazon support to clarify but their responses so far are useless. After registering and providing Amazon AMS US with my VAT ID they are still charging me 20% VAT on my marketing expenses ( which I am claiming back from HMRC on my VAT returns ). I wanted to know if this is the correct process or if Amazon should infact have stopped charging me VAT and instead use the reverse charge mechanism. Note that since providing my VAT ID the VAT has been reduced to zero on my advertising bills for several other marketplaces like Canada, France, Italy etc, just not the USA.
Hi Luca, great video! It’s really helped me get a good understanding of VAT before getting registered. Just wanted to check, is the turnover based on the sales made on Amazon or the money credited into my bank account after the fees have already been deducted? Many thanks
Thanks for the rich content , First ever video where I can understand how VAT is charged ... I have a question as non-UK based company have registered already for UK VAT and having stock in Amazon UK FBA do I have to pay VAT once I export goods to the FBA facilities ? or wait first until the sales to be done charging the customer and then report it to HMRC?
You will need to pay import VAT at the time when the goods enter the UK but this can be claimed back from HMRC. When sales are made on Amazon, VAT will be charged on those sales (output VAT) and you will need to pay that VAT to HMRC. As your company is not UK based, under new rules, Amazon may collect that VAT on your behalf and send it directly to HMRC.
@@LucaDavenport Apricated your reply, actually I found what is called postponed accounting for VAT which explained as "Rather than paying import VAT on goods at the border, and then reclaiming it on your next VAT return, you ‘postpone’ the import VAT. This means that you’ll account for the import VAT and recover it, all on the same VAT return. You won’t need to make a physical payment for the import VAT when your goods reach the UK border." Do I can use this scheme for non-UK, Non-UE registered company which have UK VAT number and UK EROI , in order to export to Amazon FBA!?
@@LucaDavenport Thanks for your reply, actually I was thinking that Duty deferment and Postponed accounting is different things ! as Duty deferment will defer payment of (Customs Duty, excise duty & import VAT) while Postponed accounting or PVA will only postpone VAT payment.
Hi Luca thanks for informative video. Wanted to ask question IS it worth registering VAT even if you uder 85k threshold?? Most wholesale distributors don't give trade account without VAT registration. Any help will be appreciated
No I wouldn't recommend doing that as it will reduce you profits by quite a lot. Your profits are always higher when you are not VAT registered, so enjoy it while it lasts!
Hey Brandon, if you're going to be selling products online that have been imported from abroad, it's super important to work out what your Landed Cost Of Goods Sold (LCOGS) is when you are doing your profit calculations. LCOGS is the total cost per unit for you as a seller and includes: Unit price, shipping, insurance, duties & VAT. If you are VAT registered the LCOGS does not include VAT as you can claim this back. If you want to work out how to calculate import duties and VAT, give this video a watch: ruclips.net/video/sCeI-LRwMiA/видео.html
If I am not VAT registered and pay the 20% and duties when importing do I have to pay any form of tax on any profits I make? Would these profits potentially push me into a higher tax bracket as I work as well?
Hey, so VAT and income / corporation tax are two separate independent things. If you're not VAT registered you do not need to charge VAT on the sale price of the item, however regardless of whether you are VAT registered or not, you will need to pay tax on your profits. If you own a LTD company, then you will pay corporation tax on your profits, then income tax on what you pay yourself from the business. If you're a sole trader then you will not pay corporation tax, you will just pay income tax on your profits. If you already work and are close to a tax bracket, then yeah anything paid out to you as an individual will be seen as income and may push you into a higher tax bracket. Hope that helps!
Hey. Thanks for this video, very helpful! I had a question regarding when to register for VAT. I understand the threshold is 85k turnover, but does this mean that we should register for VAT once we do 85k or more in sales on Amazon, OR, once our payments from Amazon reach or exceed 85k? As I do more than 85k annually in sales on Amazon, but obviously Amazon take their fees from our sales and send us the rest, which is then below 85k.
Hello! Lucca great video. In one of the comments, I understood that if I live in Portugal for example, and just put my stock only in an EU country (ex: Spain), I only need to register my VAT number generated by Spain, this way I can sell to the entire European community? Otherwise, if I also want to place my stock in Germany for example (Spain and Germany) will I also have to register another VAT number generated by Germany? thanks for your help
Hi Luca. Thanks for a very nice video. My question is, do individual sellers also need to be VAT compliant? For example, if the individual seller is from the EU but not based in UK and want to store his products in a UK warehouse then does he still need to be VAT compliant? I am struggling to find this answer...help me, please!!!!
Hey, glad you found the video helpful! Yes you will still need to be VAT compliant. I would recommend having a consultation call with a UK accountant as you can normally book one in for free and they will be able to help you further.
Hi Luca, Thanks for the great video, as far as I was aware as a VAT registered seller we can reclaim VAT on marketing but i thought we were unable to reclaim VAT on the FBA and referral fees as they are based in Luxemburg? Please would you be able to clear this up? THanks
Hey, that is about right. So as a VAT registered seller, Amazon charges you VAT on ad spend (from the UK), therefore you can claim it back. However they do not charge you VAT on other selling fees charges from Lux, therefore you can't claim anything back. It's called 'reverse charge' method.
Hi this information is great thanks for that.. However, I just registered with Amazon FBA programme, my business is based in the U.K and I do not have a turnover of 85k and the customer service just told me that in order for me to sell on amazon I need a Vat Number. I am very confused as the information I have gathered is says otherwise.
Hey, if your business is based in the UK and your turnover is under £85k p/a then you do not need to be VAT registered yet. Not sure why Seller Support is telling you that you need to be!
Thanks for this great video! Can you help me with a question? Does this mean that if you pay the 20% import VAT fee, you don't have to pay VAT on items sold? I have a US based company that paid 20% VAT on importing the products and now I'm being charged VAT per sale by Amazon as well. Seems like a 40% tax is pretty steep...
Hey! You can claim back all the import VAT you paid back when you do your VAT returns. So if you’ve paid £100 import VAT already and owe HMRC £200 on sales (output) VAT you only need to pay them £100 as you have already technically paid £100 of what you owe. Hope that makes sense
Thank you for the great video! :) Do I collect money from amazon for vat, and send the vat collect to hmrc or does amazon send it to them directly? Thank you so much for your help :)
@@LucaDavenportwhen u say collect what exactly do u mean as I already paid vat to Amazon for each order does that mean I have to pay hmrc again vat on all my profit or just show them records of me paying vat to amazon. I’m confused whether I pay it twice with amazon and separately with hmrc but I’m not sure please help?
Hi Luca, Thanks for this video. I found it very useful. You mentioned that we need to be VAT registered only when we're above the 80K threshold (now 85K) in the UK. However, don't we need to be VAT registered if we're under the 85K threshold but are planning to import products from China for our own private label? We'd need the EORI and VAT number right?
Nope! If your under the £85K threshold then you do not need to be VAT registered. You can just apply for an EORI number and import using that. Once you become VAT registers your vat number will be linked to your existing EORI number
Hey luca I have just registered a LTD company in UK and I'm the resident of UK and nationality holder and open a amazon seller UK account for selling and doing fba do I have to registered for VAT as I started from today to sell on amazon So, what to do as amazon saying this: Dear Seller, You may be legally required to be VAT registered in the United Kingdom (UK) based on Seller Central settings. Under UK law, all online marketplaces must prevent non-UK businesses that are storing products in the UK from offering products for sale after the marketplace becomes aware that the business is not meeting its UK VAT registration requirement. Once you place inventory in the UK, you will be required to be VAT-registered and to upload your UK VAT number to Seller Central within 90 days. Why is that I have just list a product on it and afte listing I got this email why as we know that we have to register VAT only after the 85k GBP threshold. please answer
That is only for non UK based businesses. If you and your business are based in the UK, then you don’t need to be VAT registered until you hit the threshold. Just contact Amazon and explain to them that your business is UK based 👍
Hello, if my priduct cost 243 £ i must collect 48,6 £ for VAT from my customers in UK, What about income tax ? If my one year profit more than 200000£ And i am LTD ? How many taces in UK ? 4 type ? Vat? National insuranse , corparative ?
1) How can we find out dimensions when we are doing Wholesale from a third party website, There is only having an option of delivery and payments. - Even they are not giving it before on call!
Does a LTD still have to pay corporation tax? I’ve been reading a lot online and it says it’s between 19-25%, also that you have to submit records every 3 months. Am I wrong in the impression that you can open a limited company and not do anything regarding paperwork and stuff until you hit the 80k threshold?
Hi, thanks for such a informative content. I didn't find any link in the description for pre and post vat registration calculator as mentioned in the last of the video, Please can you add the link
So the referral fee and and fba fee, stays the same when u go VAT reg but you just take off the 20%? But the fee is the same for non vat reg and reg members?
HI Luca, amazing content and great explanation, I am UK FBA seller (non VAT registered) and I want to sale to Germany (eventually Pan EU FBA), do I need to be VAT registered at UK first ? Secondly, do you suggest any link to get VAT registration service for Germany or Pan EU ?
What of I am VAT registered, but still reinvest all my profit to buy new stock in that 3 months period? That means I am not paying any extra money to hmrc, even getting some refund, right?
Hey, I sure can! I run an Amazon FBA training program which includes an online course, tools, templates and 1-1 email support. You can find out more info here: www.amazonbrandacademy.com/
Really helpful video thank you! I've heard for verification you now need to be VAT registered regardless of threshold.. I don't know how this can be true. This source is credible but from the US. I wonder if it's misleading as this doesn't apply to UK based sellers. I wondered if you've heard of any changes to verification from UK sellers? Cheers 👍
Hey Kay, that would be the case if your company was based outside of the UK and you wanted to hold stock in the UK, as you wouldn't have any VAT threshold. If your company is based in the UK, you will not need to be VAT registered to create a Seller Central account, unless of course your company turnover is above £85K.
Most Chinese sellers priced their items at a super low price in EU marketplaces. I'm wondering if they don't pay for VAT in the EU? Any thoughts on this?
If they hold stock in the UK they will need to be VAT registered in the UK and charge VAT on the products they sell. One of the reasons why some Chinese sellers are able to sell at such low prices is simply because they are often able to source products for a lower price than UK based sellers.
Hi. Very informative and useful content. Thank you :) I would like to ask you a question: If one is selling in Europe and business is based in Germany and VAT is also registered in Germany only, I understand that the revenue from Germany would be for VAt according to German Tax laws. But if the business is selling in France or UK a well and has yet not reached threshold (Stock is in Germany), would the revenue from France or UK be also deducted for VAT in Germany (because business is only registered for VAT in Germany)? or the revenue from UK or France would be VAT free in Germany too? I hope I wrote my question clearly. Thank you
Hey, yeah I understand what you mean! If you are VAT registered in Germany and selling into other EU countries you would not need to be VAT registered in those other EU countries as long as you are only holding stock in Germany. You would still have to collect VAT on those sales at the German rate (member state of origin rate).
@@LucaDavenport Thank Youy very much! One more question: For VAT regitered Profit=/How to calculate correctly income tax? e.g Seller Proceeds 9.81,Must decrease 20% income tax?or from 9.81 - investment -20% income tax? Thank You
@Luca Davenport Very good video. However, something doesn't seem right. I have been in contact with Amazon support and I was told that there is no option to be not VAT registered and selling on Amazon using FBA. Have you or any1 else, come across something like this? I live in the UK, want to sell in UK's market only, my limited company is registered in the UK address but was told that I must have a VAT number regardless. I thought this must be some new regulations, but NO. I was told that this is always the case - which I didn't want to believe. I have a screenshot from that conversation too.
No that is totally incorrect, I have no idea why Amazon is telling you that! If you are a UK resident operating as a UK LTD company then you do not need to be VAT registered until you hit £85K in annual revenue.
Hi Luca, There is also a 7.5 VAT FRS which most of the Amazon UK sellers consider registering that has a threshold of £230K i guess. Please explain that aswell. :)
Hey! So if you are VAT registered on a Flat Rate Scheme (FRS) you technically still have to charge 20% VAT on your products, but will only have to pay 7.5% to HMRC and you can keep the difference. The negative of being on a FRS is that you cannot claim back VAT paid on goods and services (business expenses), known as input VAT. If you are on a FRS you will be charged VAT on Amazon PPC spend but will not be charged VAT on Amazon sellers fees. To work out what scheme is best for you, you need to do your own calculations and speak with an accountant. Hope that helps!
Great video, thank you! I am not VAT registered and I have had a request from a buyer for a VAT invoice. Amazon keep messaging me to activate 'VAT calculation service'. What should I do please? Thanks in advance
Glad it was helpful! You can't activate VAT calculation services if you are not VAT registered. Instead just use a free invoice generator online to create a non-vat invoice and just upload that for the customer.
@@LucaDavenport And if the business is based outside of the UK, such as Germany, and I am selling on Amazon Germany with my products located in an Amazon fullfilment center in Germany, if I sell products through EFN to Amazon UK customers? Do I still need to be VAT registered to UK?
Great video I have a question. If I buy something from Amazon I paid vat on it (business acc ) and I then sell that item on via Facebook or eBay .. do I charge vat on top or not... this is the confusing part for me (‘once vat registered) hope that makes sense
Hey Shelley, if you are VAT registered then yes you would pay VAT when you purchase the item and would need to charge VAT when you sell the item on, however you would be able to claim the VAT you paid on the item (input VAT) back when you do your VAT returns.
Hey Luca thanks for the informative video 😊 If we (British citizen living in Britain) are selling on Amazon US would we still have to charge vat on our product even if the products aren’t being sold in the UK?
Glad you found it helpful! No you wouldn't need to charge VAT but you would need to charge US sales tax which varies depending on the state the product is sold in.
@@LucaDavenport hi. Seriously, out of all the posts I have been through on this subject, yours is by far the best and clearest. Many thanks and congrats. With regards this particular question, however. So, even though you don’t charge VAT on US sales, would the revenue from the US count towards the £80k threshold? Thanks
Hi, is there an obligation to register for VAT if turnover of 85K is generated from overseas sales ( USA). In other words, do overseas sales count towards VAT registration threshold (£85,000)?
If am vat registered I still have to pay my supplier right the vat, lastly the output tax's I charge my customers on Amazon , is it a must and if the threshold is under 85 k do I still pay vat on the output vat, e g. The vat I charged my customers?
The threshold is just a point at which you MUST be VAT registered. Once you are VAT registered, yes you have to pay your supplier VAT but you can claim it back. Yes you will need to pay output VAT to the government regardless of the threshold (if you are VAT registered).
🚀 AMAZON FBA TRAINING & MENTORSHIP PROGRAM: bit.ly/3rr9bNy
🎥 FREE AMAZON FBA TRAINING: bit.ly/3O4ortk
📞 Book a 1-1 Coaching call with me: bit.ly/3pWCbPk
Luca this is SUCH a clear explanation of a confusing topic for newbies and has helped me on many of an occasion already. Thank you for making this video dude!!
Hey buddy, YOU ARE THE MAN!!!!!
After days of research I become more confused that I was.
Finally I found this video, it cleared up everything in 10 min.
Thanks 👍👍👍👍👍
Glad I could help!
This is the first video explaining VAT where I actually understand it 😂 I’ve been using FBA calculator and didn’t know 20% VAT comes off the profit... big difference that most RUclips channels do not advise! 🙈
1000% this makes the most sense. This guys got a gift for explaining things
The UK VAT threshold is mis-quoted in this video for tax year 2020/21 (and this video was released May 2020) the threshold is actually £85K not £80K, important detail to note.
So if you earn over 85k that's when you must register for VAT ?
@@TezzarecordsIRL Once you have hit £85K turnover in a rolling 12 month period you trigger VAT liability and must register for VAT.
@@TezzarecordsIRL yes
Thanks for that information. If i buy goods from China for dropshipping to my customer in uk(my company is uk registered but not VAT registered ) via eBay should the Chinese company charge me VAT and am I the “consumer”? The advice from HMRC seems to make things so obscure and you make it so clear. And if I register for VAT my accountancy firm (OSOME) will charge me a lot more and I haven’t even started selling yet!
VAT can be a fairly confusing topic but hopefully the video helped break it down for you! Any questions, just ask!
Luca, unless it's required what is the point of registering for VAT then? According to your video, you always end up with less profit dollar in your pocket (3.2 vs 3.84) if registered [not to mention the headache of VAT compliance]
6:55 you explain that you can return a portion of your sales VAT based on your expenses. 9:13 you do not take into consideration that you will return a portion of your VAT based on your expenses VAT. Why?
one thing i don't understand; I'm downloading the merchant VAT invoice and on it it's showing there's 0% VAT for the seller fees. So I can't claim them back?
I registered myself as VAT exempted and guest what? They charged me Vat in my sell. I have contacted amazon through the help button, thankfully they are really good at replying speed. Great video, really helpful!!
What a short but informative video. I have been looking for this. Thanks a lot.
This video was amazing thank you. I tried watching a bunch of videos before this to understand it. Subscribed!
Cheers, glad it helped!
You made this very simple and easy to understand, great job!
Glad you liked it!
What a easy way to explain! Thanks
Hi. Please make a video explaining how to file your VAT on the seller central portal
First ever video where I can understand how VAT is charged. Super cool explanation. How can I contact you if I need your help?
Awesome, glad the video was helpful! I'm afraid I only offer 1-1 support to our Academy members. You can find more info here: www.amazonbrandacademy.com
Helpful video. Just want to clarify. If I am VAT registered, then I charge VAT on Amazon, but when I import I don't have to pay VAT to customs?
Yes, exactly! You may have to pay it at the time but you can claim it back
Great video, Could you please answer my question based on your experience in selling on Amazon as i am a Uk resident and my limited company is new?
Is it better to register in the VAT from the beginning or not?
Becoming VAT registered will lower your net profit so it’s much better to wait until you need to be VAT registered before you do it!
This guy is a legend usefull info just curious do you add the vat after you added all amz fees shipping and product cost or do you add vat after you add your margins shipping cost and product cost because 20 percent looks different on each number 20 percent added to 15 will look different from 20’percent added to 20.00 ?
Amazing explanation Luca. You are a top man. Thank you
Great, how about flat rate VAT how does that work out?
With the 7.5% FRS, you cannot reclaim any VAT paid on business expenses (input VAT), however only need to pay HMRC 7.5% VAT and you can keep the remaining 12.5% collected on the sale.
how do you explain to this sent by Amazon: "Yes, we see that you are VAT exempted and are not supposed to be charged VAT on orders and the services we provide you. However, the orders which have alerts saying “MarketPlace Facilitator” are the one’s wherein all the sellers (may it be VAT registered or VAT Exempted) have to pay VAT as per the legislation. "
nice explanation but Amazon itself ask to be VAT registration if your sales exceed £15k. What about this OSS scheme and force for vat registration after £15k of sales?
Awsome Luca Davenport You got me out confusions...
Brilliantly clear explanation. Thanks.
Glad it was helpful!
Super detailed break down, well explained! :D
Do you know most sellers in UK priced their item at a very low price as the price point usually will be negative profit after paying the VAT! Don't they aware they will need to pay VAT charges?
The VAT registration threshold was 85k (not 80k). Its going to increase to £90k from April 2024
What happens if I’m from Ireland does the threshold apply to me. If My brand name and logo is registered in the uk
If your business is registered outside of the UK, then no the threshold will not apply to you. You might want to look into setting up a UK LTD company so worth speaking to an accountant.
Hi Luca,
Great, consice video on VAT, i have question
Are we reponsible for paying VAT on the sales made through amazon or Its already Amazon who collects on our behalf and submit to HMRC
Thanks
Excellent video. Clear and concise. Thank you for posting
Glad it was helpful!
Hey Luca, thanks for your explanations, your videos are always very clear! When buying goods on platforms like Alibaba, they are now adding a 20% VAT on the final price (apparently collected and remitted to the UK tax authorities - unless you provide a VAT registration number). First question: is this VAT charged only once then by Alibaba and not during custom clearance? Second question: As a non-VAT registered sole trader, would you then have to anyway pay for his upfront and charge indirectly your customers to recover for this expense? (i.e in your example, the revenue remains for both at £10 for the sale revenue) ?
VAT should only be charged once by Alibaba and then should not be charged again by UK customs, provided all the paperwork showing the VAT has already been paid, is present on the shipment. If UK customs charge you a second time, you can send them evidence that you have already paid it and they will refund you. Yes, that is correct! VAT on the goods (input vat) is an expense for you as a non VAT registered business but because you don't have to charge VAT / collect any VAT (output vat) on your sale price, you recoup it there.
Hi Luca. Great video just to clarify if you are VAT registered you wont have to pay on stock as in you wont have to pay customs VAT?
You will have to pay it but you can claim it back when you do your VAT returns
wow wow wow such an amazing video so clear and easy to understand great work keep it up
Thanks buddy!
can you confirm which software you use for illustration. It is amazing. (PS the concept are well taught, no doubt on it.)
Hey, glad you found the video helpful! I use Canva for all the illustrations. Good, cheap and easy to use
Can you recommend a decently priced UK accounting service for VAT returns for an overseas customer
Great info, thank you! I'm an estate photographer providing digital image downloads. I know I will not surpass the £85,000 threshold, so how would I display my pricing? Some online pricing states "VAT Included" so the buyers knows they might be able to deducted the VAT.
hi Luca, it's a great video! Thanks for this!
A question if no VAT registration, how could I pay the expenses' VAT to the govement?
You don't! You pay it the supplier of the expense and they pay it to HMRC.
Great video about VAT! People say that you have more chances to get responses and good prices from suppliers if you are VAT registered than if you ar not. Is it true?
I mean about UK Wholesale...
Hey, I do not sell sell big brand products on Amazon (Wholesale) so It's not my area of expertise I'm afraid! However I wouldn't be surprised if that were true, as being a VAT registered company tends to signify that you have a larger revenue and hence are a larger company. If you're a larger company I would assume wholesale suppliers would be more willing to work with you. Hope that helps!
Luca this is such a great video. Thank you for clearing my VAT concepts. One thing I'm still wanna ask that on 12 pounds, the VAT should be 2.4 pounds as 20% of sale price?
All B2C sale prices in the UK, including on Amazon, always include VAT already. So a £12 (inc VAT) sale price is actually a £10 (exc VAT) sale price + £2 VAT.
Great Vid! 😄👍 I've watched a few videos, they say you must register FBA as a 'Limited Company'... could I not register as a 'Sole Trader' or is it just best to jump straight in as a VAT registered company?
Thanks! You can on Amazon as either a sole trader or LTD company and if you’re based in the UK, you won’t need to be register for VAT until your turnover is above £85K per annum. Operating as a LTD is more tax efficient, that’s why people tend to recommend it over sole trader
Wait so if not VAT registered why do I have to pay Amazon VAT fee and stock VAT surely that is payiny it twice?
Hi Luca, great video. Would really appreciate a response to this.
I have been selling on amazon uk for over a year now. I'm Vat registered and have vat services on Amazon. I have access to my AVTR and amazon say that all vat is amazon responsibility to collect and remit. However I'm just wondering where do do the tax authorities go to find this remitted vat?
I'm being checked for vat compliance at the moment and I know Amazon have collected the vat i just don't know where to tell them to find the payments.
All the best,
Max
Hi! Hope you can answer:
If I am a sole trader and contact HMRC for proof that I sell on Amazon for the money back (Luxembourg tax), would I need to provide all past invoices and receipts etc to them? Thanks!
Hey! No, I've never heard of them asking for that info
Some wholesalers ask for vat number so as beginners of Amazon journey, what should someone do ?
Luca, thanks for this. Firstly, Im registered for VAT (voluntary) for flat rate scheme so how would that affect my business? Also, I am registered but for mu music business (not e-commerce). If I go exempt on Alibiba for example do I have to charge VAT on my amazon stock? Thanks.
Is there anything like Flat VAT Stream (7.5%) and Main VAT Stream (20%)? If yes, then please guide
Hey, yeah it is possible to register for the 7.5% FRS. If you do so you will only have to pay HMRC 7.5% VAT on sales but will not be able to claim back any input VAT (VAT spend on business expenses). You can find out more here: www.gov.uk/vat-flat-rate-scheme
Hi Luca, I have registered UK LTD company but I am a USA citizen and reside in the USA. I sell goods on Amazon UK which are imported from China. Do I need to apply for VAT before reaching the threshold?
Hi Luca. I have a question I was hoping you might be able to answer about paying VAT on Amazon Advertising expenses when you are VAT registered. I have been asking Amazon support to clarify but their responses so far are useless. After registering and providing Amazon AMS US with my VAT ID they are still charging me 20% VAT on my marketing expenses ( which I am claiming back from HMRC on my VAT returns ). I wanted to know if this is the correct process or if Amazon should infact have stopped charging me VAT and instead use the reverse charge mechanism. Note that since providing my VAT ID the VAT has been reduced to zero on my advertising bills for several other marketplaces like Canada, France, Italy etc, just not the USA.
Those the money come out automatically when you do fba or do you have to pay it ?
Hi Luca, great video! It’s really helped me get a good understanding of VAT before getting registered. Just wanted to check, is the turnover based on the sales made on Amazon or the money credited into my bank account after the fees have already been deducted? Many thanks
Hey! It’s total sales your business has made before any fees or business expenses.
Thanks for the rich content , First ever video where I can understand how VAT is charged ... I have a question as non-UK based company have registered already for UK VAT and having stock in Amazon UK FBA do I have to pay VAT once I export goods to the FBA facilities ? or wait first until the sales to be done charging the customer and then report it to HMRC?
You will need to pay import VAT at the time when the goods enter the UK but this can be claimed back from HMRC. When sales are made on Amazon, VAT will be charged on those sales (output VAT) and you will need to pay that VAT to HMRC. As your company is not UK based, under new rules, Amazon may collect that VAT on your behalf and send it directly to HMRC.
@@LucaDavenport Apricated your reply, actually I found what is called postponed accounting for VAT which explained as "Rather than paying import VAT on goods at the border, and then reclaiming it on your next VAT return, you ‘postpone’ the import VAT. This means that you’ll account for the import VAT and recover it, all on the same VAT return. You won’t need to make a physical payment for the import VAT when your goods reach the UK border."
Do I can use this scheme for non-UK, Non-UE registered company which have UK VAT number and UK EROI , in order to export to Amazon FBA!?
@@mohamedhass7632 Yes you can use this scheme but you will need a duty deferment account (give it a Google) and it's a little more complicated.
@@LucaDavenport Thanks for your reply, actually I was thinking that Duty deferment and Postponed accounting is different things ! as Duty deferment will defer payment of (Customs Duty, excise duty & import VAT) while Postponed accounting or PVA will only postpone VAT payment.
Hi Luca thanks for informative video. Wanted to ask question IS it worth registering VAT even if you uder 85k threshold?? Most wholesale distributors don't give trade account without VAT registration. Any help will be appreciated
No I wouldn't recommend doing that as it will reduce you profits by quite a lot. Your profits are always higher when you are not VAT registered, so enjoy it while it lasts!
@@LucaDavenport thanks for reply matee
Hi Luca, great explanation! May I ask what will be the impact of import tax +import vat when selling imported products say from China?
Hey Brandon, if you're going to be selling products online that have been imported from abroad, it's super important to work out what your Landed Cost Of Goods Sold (LCOGS) is when you are doing your profit calculations. LCOGS is the total cost per unit for you as a seller and includes: Unit price, shipping, insurance, duties & VAT. If you are VAT registered the LCOGS does not include VAT as you can claim this back. If you want to work out how to calculate import duties and VAT, give this video a watch: ruclips.net/video/sCeI-LRwMiA/видео.html
If I am not VAT registered and pay the 20% and duties when importing do I have to pay any form of tax on any profits I make? Would these profits potentially push me into a higher tax bracket as I work as well?
Hey, so VAT and income / corporation tax are two separate independent things. If you're not VAT registered you do not need to charge VAT on the sale price of the item, however regardless of whether you are VAT registered or not, you will need to pay tax on your profits. If you own a LTD company, then you will pay corporation tax on your profits, then income tax on what you pay yourself from the business. If you're a sole trader then you will not pay corporation tax, you will just pay income tax on your profits. If you already work and are close to a tax bracket, then yeah anything paid out to you as an individual will be seen as income and may push you into a higher tax bracket. Hope that helps!
Hey. Thanks for this video, very helpful! I had a question regarding when to register for VAT. I understand the threshold is 85k turnover, but does this mean that we should register for VAT once we do 85k or more in sales on Amazon, OR, once our payments from Amazon reach or exceed 85k? As I do more than 85k annually in sales on Amazon, but obviously Amazon take their fees from our sales and send us the rest, which is then below 85k.
its total sales excluding amazon fees
Hello! Lucca great video. In one of the comments, I understood that if I live in Portugal for example, and just put my stock only in an EU country (ex: Spain), I only need to register my VAT number generated by Spain, this way I can sell to the entire European community?
Otherwise, if I also want to place my stock in Germany for example (Spain and Germany) will I also have to register another VAT number generated by Germany? thanks for your help
That’s correct!
Hi Luca. Thanks for a very nice video.
My question is, do individual sellers also need to be VAT compliant? For example, if the individual seller is from the EU but not based in UK and want to store his products in a UK warehouse then does he still need to be VAT compliant? I am struggling to find this answer...help me, please!!!!
Hey, glad you found the video helpful! Yes you will still need to be VAT compliant. I would recommend having a consultation call with a UK accountant as you can normally book one in for free and they will be able to help you further.
@@LucaDavenport Thanks a lot
Best explanation. Thanks so much.
Hi Luca,
Thanks for the great video, as far as I was aware as a VAT registered seller we can reclaim VAT on marketing but i thought we were unable to reclaim VAT on the FBA and referral fees as they are based in Luxemburg? Please would you be able to clear this up?
THanks
Hey, that is about right. So as a VAT registered seller, Amazon charges you VAT on ad spend (from the UK), therefore you can claim it back. However they do not charge you VAT on other selling fees charges from Lux, therefore you can't claim anything back. It's called 'reverse charge' method.
amazing video thank you
Hi this information is great thanks for that.. However, I just registered with Amazon FBA programme, my business is based in the U.K and I do not have a turnover of 85k and the customer service just told me that in order for me to sell on amazon I need a Vat Number. I am very confused as the information I have gathered is says otherwise.
Hey, if your business is based in the UK and your turnover is under £85k p/a then you do not need to be VAT registered yet. Not sure why Seller Support is telling you that you need to be!
HI luca, can you please explain if we can file tax exemption on alibaba without register VAT?
Nope you can't I'm afraid
Thanks for this great video! Can you help me with a question?
Does this mean that if you pay the 20% import VAT fee, you don't have to pay VAT on items sold?
I have a US based company that paid 20% VAT on importing the products and now I'm being charged VAT per sale by Amazon as well. Seems like a 40% tax is pretty steep...
Hey! You can claim back all the import VAT you paid back when you do your VAT returns. So if you’ve paid £100 import VAT already and owe HMRC £200 on sales (output) VAT you only need to pay them £100 as you have already technically paid £100 of what you owe. Hope that makes sense
Thank you for the great video! :) Do I collect money from amazon for vat, and send the vat collect to hmrc or does amazon send it to them directly?
Thank you so much for your help :)
If you and your business are UK based then you have to collect it and send to HMRC. If you / your business are based abroad, Amazon will do it for you
@@LucaDavenportwhen u say collect what exactly do u mean as I already paid vat to Amazon for each order does that mean I have to pay hmrc again vat on all my profit or just show them records of me paying vat to amazon.
I’m confused whether I pay it twice with amazon and separately with hmrc but I’m not sure please help?
Hi Luca, Thanks for this video. I found it very useful. You mentioned that we need to be VAT registered only when we're above the 80K threshold (now 85K) in the UK. However, don't we need to be VAT registered if we're under the 85K threshold but are planning to import products from China for our own private label? We'd need the EORI and VAT number right?
Nope! If your under the £85K threshold then you do not need to be VAT registered. You can just apply for an EORI number and import using that. Once you become VAT registers your vat number will be linked to your existing EORI number
amazing explaination!
Hey luca I have just registered a LTD company in UK and I'm the resident of UK and nationality holder and open a amazon seller UK account for selling and doing fba do I have to registered for VAT as I started from today to sell on amazon So, what to do as amazon saying this:
Dear Seller,
You may be legally required to be VAT registered in the United Kingdom (UK) based on Seller Central settings.
Under UK law, all online marketplaces must prevent non-UK businesses that are storing products in the UK from offering products for sale after the marketplace becomes aware that the business is not meeting its UK VAT registration requirement.
Once you place inventory in the UK, you will be required to be VAT-registered and to upload your UK VAT number to Seller Central within 90 days.
Why is that I have just list a product on it and afte listing I got this email why as we know that we have to register VAT only after the 85k GBP threshold.
please answer
That is only for non UK based businesses. If you and your business are based in the UK, then you don’t need to be VAT registered until you hit the threshold. Just contact Amazon and explain to them that your business is UK based 👍
Thank you. Just what I needed to know.
Hello, if my priduct cost 243 £ i must collect 48,6 £ for VAT from my customers in UK,
What about income tax ? If my one year profit more than 200000£ And i am LTD ? How many taces in UK ? 4 type ? Vat? National insuranse , corparative ?
4:29 if i buy from china products with DDP they pay all the fees but do i still need the tax/vat to pay?
If you buy products on DDP terms, the seller will normally cover both import duties and import VAT on those goods.
Just subscribed, great video!
1) How can we find out dimensions when we are doing Wholesale from a third party website, There is only having an option of delivery and payments.
- Even they are not giving it before on call!
Maybe try searching for the product manuals for each product on google, they should include the dimensions
does a LTD need to be VAT registered? Im only small seller doing it for hobby to learn before hopfully expanding in a few years.
Nope, not until the LTD surpasses £85K in annual turnover
Does a LTD still have to pay corporation tax? I’ve been reading a lot online and it says it’s between 19-25%, also that you have to submit records every 3 months. Am I wrong in the impression that you can open a limited company and not do anything regarding paperwork and stuff until you hit the 80k threshold?
Hi, thanks for such a informative content. I didn't find any link in the description for pre and post vat registration calculator as mentioned in the last of the video, Please can you add the link
Glad you found the video helpful! You can download the tool here: www.amazonbrandacademy.com/product-research-bundle
What an amazing & informative video
Hi Luca, I registed the Vat when I set up the limited company, but I have not sell anything so far, Could I deregister for the VAT?
Yep, you can deregister for VAT as long as your turnover is below the £85K threshold
So the referral fee and and fba fee, stays the same when u go VAT reg but you just take off the 20%? But the fee is the same for non vat reg and reg members?
Yep!
HI Luca, amazing content and great explanation, I am UK FBA seller (non VAT registered) and I want to sale to Germany (eventually Pan EU FBA), do I need to be VAT registered at UK first ?
Secondly, do you suggest any link to get VAT registration service for Germany or Pan EU ?
No you don't have to be VAT registered in the UK to be VAT registered in Germany
@@LucaDavenport Thanks. Would appreciate if you can make a video on how to do Pan-EU VAT registration, Responsible Person etc....
What of I am VAT registered, but still reinvest all my profit to buy new stock in that 3 months period? That means I am not paying any extra money to hmrc, even getting some refund, right?
Yep, if your input VAT is higher than your output VAT during a certain period, then you will be due a VAT refund
I live in Greece and want to start Amazon fba , can you help me out with some info ?
Hey, I sure can! I run an Amazon FBA training program which includes an online course, tools, templates and 1-1 email support. You can find out more info here: www.amazonbrandacademy.com/
I messaged you on Instagram man !
Really helpful video thank you! I've heard for verification you now need to be VAT registered regardless of threshold.. I don't know how this can be true. This source is credible but from the US. I wonder if it's misleading as this doesn't apply to UK based sellers.
I wondered if you've heard of any changes to verification from UK sellers? Cheers 👍
Hey Kay, that would be the case if your company was based outside of the UK and you wanted to hold stock in the UK, as you wouldn't have any VAT threshold. If your company is based in the UK, you will not need to be VAT registered to create a Seller Central account, unless of course your company turnover is above £85K.
@@LucaDavenport USA doesn't have federal sales tax , why Carmaro Lt2 is $30000usd in Usa , but 36000 pounds in UK
Most Chinese sellers priced their items at a super low price in EU marketplaces. I'm wondering if they don't pay for VAT in the EU? Any thoughts on this?
If they hold stock in the UK they will need to be VAT registered in the UK and charge VAT on the products they sell. One of the reasons why some Chinese sellers are able to sell at such low prices is simply because they are often able to source products for a lower price than UK based sellers.
@@LucaDavenport some of them collect the VAT, keep the money without paying to the HMRC isn't it?
Hi. Very informative and useful content. Thank you :)
I would like to ask you a question: If one is selling in Europe and business is based in Germany and VAT is also registered in Germany only, I understand that the revenue from Germany would be for VAt according to German Tax laws. But if the business is selling in France or UK a well and has yet not reached threshold (Stock is in Germany), would the revenue from France or UK be also deducted for VAT in Germany (because business is only registered for VAT in Germany)? or the revenue from UK or France would be VAT free in Germany too?
I hope I wrote my question clearly. Thank you
Hey, yeah I understand what you mean! If you are VAT registered in Germany and selling into other EU countries you would not need to be VAT registered in those other EU countries as long as you are only holding stock in Germany. You would still have to collect VAT on those sales at the German rate (member state of origin rate).
@@LucaDavenport Thanks a lot! :)
Hi Luca, do we need to be VAT registered as a new sole trader? My turnover is less than £85k, but my supplier is asking for my VAT number.
Hi Andrew, no you don't need to become VAT registered until your turnover is higher than the threshold.
Hello, I have a question,do you mean when I am registered VAT and I buy something from the distributor,I don't pay VAT anymore?
Thamk You
You will have to pay it at the time but you are able to claim it back so effectively you don't have to pay it. All business purchases are VAT free
@@LucaDavenport Thank Youy very much! One more question: For VAT regitered Profit=/How to calculate correctly income tax? e.g Seller Proceeds 9.81,Must decrease 20% income tax?or from 9.81 - investment -20% income tax? Thank You
Is this for a limited company too?
Yep!
@Luca Davenport Very good video. However, something doesn't seem right. I have been in contact with Amazon support and I was told that there is no option to be not VAT registered and selling on Amazon using FBA. Have you or any1 else, come across something like this? I live in the UK, want to sell in UK's market only, my limited company is registered in the UK address but was told that I must have a VAT number regardless. I thought this must be some new regulations, but NO. I was told that this is always the case - which I didn't want to believe. I have a screenshot from that conversation too.
No that is totally incorrect, I have no idea why Amazon is telling you that! If you are a UK resident operating as a UK LTD company then you do not need to be VAT registered until you hit £85K in annual revenue.
so if I 'm selling in the US only through a UK LTD as an FBA seller (all stocks in US warehouses)
then do I need to VAT register? TIA!
No you won't need to charge VAT on sales made in the US, instead you will need to charge US sales tax
Well explained, thank you for the informative video.
Hi Luca,
There is also a 7.5 VAT FRS which most of the Amazon UK sellers consider registering that has a threshold of £230K i guess. Please explain that aswell. :)
Hey! So if you are VAT registered on a Flat Rate Scheme (FRS) you technically still have to charge 20% VAT on your products, but will only have to pay 7.5% to HMRC and you can keep the difference. The negative of being on a FRS is that you cannot claim back VAT paid on goods and services (business expenses), known as input VAT. If you are on a FRS you will be charged VAT on Amazon PPC spend but will not be charged VAT on Amazon sellers fees. To work out what scheme is best for you, you need to do your own calculations and speak with an accountant. Hope that helps!
@@LucaDavenport thank you for your reply... Really helpful 😊
Great video, thank you! I am not VAT registered and I have had a request from a buyer for a VAT invoice. Amazon keep messaging me to activate 'VAT calculation service'. What should I do please? Thanks in advance
Glad it was helpful! You can't activate VAT calculation services if you are not VAT registered. Instead just use a free invoice generator online to create a non-vat invoice and just upload that for the customer.
@@LucaDavenport Thank you!
@@LucaDavenport Hi Luca ,can you shoot video about how to create online invoice. Thanks
very informative , many thanks , I subscribed just now
Thanks for the sub!
I was under the impression that you had to be vat registered for fba regardless of the turnover?
Nope! Only if your business is based outside of the UK
@@LucaDavenport And if the business is based outside of the UK, such as Germany, and I am selling on Amazon Germany with my products located in an Amazon fullfilment center in Germany, if I sell products through EFN to Amazon UK customers? Do I still need to be VAT registered to UK?
@@emre10121 Nope, you do not need to be VAT registered unless you actually hold stock in the UK
Great video I have a question. If I buy something from Amazon I paid vat on it (business acc ) and I then sell that item on via Facebook or eBay .. do I charge vat on top or not... this is the confusing part for me (‘once vat registered) hope that makes sense
Hey Shelley, if you are VAT registered then yes you would pay VAT when you purchase the item and would need to charge VAT when you sell the item on, however you would be able to claim the VAT you paid on the item (input VAT) back when you do your VAT returns.
@@LucaDavenport thank you it’s so confusing
Hey Luca thanks for the informative video 😊 If we (British citizen living in Britain) are selling on Amazon US would we still have to charge vat on our product even if the products aren’t being sold in the UK?
Glad you found it helpful! No you wouldn't need to charge VAT but you would need to charge US sales tax which varies depending on the state the product is sold in.
@@LucaDavenport hi. Seriously, out of all the posts I have been through on this subject, yours is by far the best and clearest. Many thanks and congrats. With regards this particular question, however. So, even though you don’t charge VAT on US sales, would the revenue from the US count towards the £80k threshold? Thanks
we are starting a new store on shopfy in Uk.. we r not VAT registered.. what should i add in tax setting taking into conderation? please help thanks
Hey, if you are not VAT registered then you should not charge VAT on your Shopify sales
Hi, is there an obligation to register for VAT if turnover of 85K is generated from overseas sales ( USA).
In other words, do overseas sales count towards VAT registration threshold (£85,000)?
Perfect video, thanks a lot!
Hi are there any videos to show me what to do now I'm VAT registered? Bit worried I won't be updating my account correctly
I don't have any videos on that topic I'm afraid!
Hello if your vat registered and earn under 80k per year do you still pay vat ?
If you are not VAT registered, you pay input VAT but do not have to charge or pay HMRC output VAT.
The VAT paid to distributors will be added to my profit???
If you are VAT registered, you can claim that VAT back from HMRC
@@LucaDavenport thank you very much!!!
If am vat registered I still have to pay my supplier right the vat, lastly the output tax's I charge my customers on Amazon , is it a must and if the threshold is under 85 k do I still pay vat on the output vat, e g. The vat I charged my customers?
The threshold is just a point at which you MUST be VAT registered. Once you are VAT registered, yes you have to pay your supplier VAT but you can claim it back. Yes you will need to pay output VAT to the government regardless of the threshold (if you are VAT registered).
@@LucaDavenport that output is what I charge my customers which is a must