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!
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! 🙈
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?
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 👍👍👍👍👍
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
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.
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 ?
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 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?
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.
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. "
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
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?
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
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!
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?
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, 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 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 👍
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
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!
@@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 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.
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.
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! 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!
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, 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 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!
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
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
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/
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
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. 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.
so even if im italian citzenship recidence in italy and my business is based in the UK i dont need vat reg itration until i hit the £85K right? Please help
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?
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
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. 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.
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!
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!
hi sir，I am malaysia seller, just want to ask that is all the step and statement you mentioned are suitable for Malaysia as well? If I want to start my Amazon business. Thanks for your information, hope you can reply me asap🙏🙏😁
Hi there! Yeah most of the training on my RUclips channel and also full training program is relevant to any Amazon marketplace. Of course some of the topics, such as VAT and import duties are UK specific. Thanks!
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, 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 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 ?
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
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).
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?
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?
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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!
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
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?
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!
What a short but informative video. I have been looking for this. Thanks a lot.
What a easy way to explain! Thanks
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!!
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!
The VAT registration threshold was 85k (not 80k). Its going to increase to £90k from April 2024
Amazing explanation Luca. You are a top man. Thank you
Awsome Luca Davenport You got me out confusions...
Brilliantly clear explanation. Thanks.
Glad it was helpful!
amazing explaination!
Excellent video. Clear and concise. Thank you for posting
Glad it was helpful!
wow wow wow such an amazing video so clear and easy to understand great work keep it up
Thanks buddy!
Super detailed break down, well explained! :D
amazing video thank you
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
Best explanation. Thanks so much.
Thank you. Just what I needed to know.
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.
Well explained, thank you for the informative video.
👍 Excellent knowledge bundle of thanks brother ♥
Perfect video, thanks a lot!
Just subscribed, great video!
What an amazing & informative video
Thank you for this, it was so helpful. x
very informative , many thanks , I subscribed just now
Thanks for the sub!
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 ?
very imforamtive, video well broken down
Glad you found it helpful
So helpful. Deffo a like and subscribe for me. Helped me decide and I ended up not registering for VAT as I didnt need it.
Super helpful. Thanks
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 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!
Great video thank you so much
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.
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. "
Some wholesalers ask for vat number so as beginners of Amazon journey, what should someone do ?
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
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?
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
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.
Thank you
Wait so if not VAT registered why do I have to pay Amazon VAT fee and stock VAT surely that is payiny it twice?
Fantastic content. Thanks! :)
Glad it helped!
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!
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?
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
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, 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
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.
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
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 👍
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
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
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 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.
Nice 👍 video. Can I sell as an individual without registering as trader
You have to register as either a sole trader or LTD
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
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.
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.
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
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.
Can you recommend a decently priced UK accounting service for VAT returns for an overseas customer
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. Amazing useful ideas in the video. Where can I find the free calculator.
Hi Ismail, you can download it here: www.amazonbrandacademy.com/product-research-bundle
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, 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
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 Please make a video about new rules of VAT applied by the UK after Brexit
I’ll add it to my list!
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 !
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
thanks for the video this is so clear and informative!
I thought the threshold was £85,000?
great video!
HI luca, can you please explain if we can file tax exemption on alibaba without register VAT?
Nope you can't I'm afraid
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. 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
Can you do a video with English language
so even if im italian citzenship recidence in italy and my business is based in the UK i dont need vat reg itration until i hit the £85K right? Please help
As far as I understand it, that is correct! But you should always confirm with a UK based accountant first
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?
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!
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. 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
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!
Net profit not 32% , it 5% for small business . You are mentioning turnover your costs
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 😊
hi sir，I am malaysia seller, just want to ask that is all the step and statement you mentioned are suitable for Malaysia as well? If I want to start my Amazon business. Thanks for your information, hope you can reply me asap🙏🙏😁
Hi there! Yeah most of the training on my RUclips channel and also full training program is relevant to any Amazon marketplace. Of course some of the topics, such as VAT and import duties are UK specific. Thanks!
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,
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 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....
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
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, 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?
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
Those the money come out automatically when you do fba or do you have to pay it ?