How to Become a VAT-Exempt Seller on Amazon's United Kingdom Marketplace

How to Become a VAT-Exempt Seller on Amazon’s United Kingdom Marketplace

By: / Asinwiser, Value added tax / Comments Off on How to Become a VAT-Exempt Seller on Amazon’s United Kingdom Marketplace

Every nation has a unique value-added tax (VAT) system, calculates and collects VAT using various methods. As most products are subject to VAT (Value-Added Tax), hence handling VAT for Amazon Fulfillment will be complicated for Amazon vendors. 

If you think, hiring an expert accountant will be helpful for you, then take this thought from your mind.

Through this article, we’ll help you understand how to become a VAT exempted seller on Amazon.

How can I sign up for Amazon’s VAT Services account?

Navigate to the Manage your VAT area (found in Seller Central under Reports) and pick the countries that you wish to be registered for VAT Services on Amazon. You would be required to confirm the information about your company ). Once this is completed, click on Agree and Continue to be enrolled in Amazon’s VAT Services in the countries that you have chosen. It is your seller account that will be charged for the appropriate registration (one-time) and monthly filing costs.

The time it takes to process a VAT application

Depending on which nation you are registering for VAT in and which method you choose to submit your application (manual or online), it might take anything from a few business days to several months to months to process your application. When it comes to processing applications within the United Kingdom, HMRC tries to complete them within ten working days. Nevertheless, it frequently takes far longer than this.

In the meanwhile, what should you do throughout the period of time between the moment you registered and the time your VAT number is issued?

While you will not be able to charge VAT until after you have got your number, it is crucial to save all of your invoices in order to be able to claim back the VAT you paid on these bills at a later date.

For Amazon sellers, that’s not particularly applicable – you’ll be better off continuing to trade that you were before registering for VAT but just deducting the VAT from your sales as a cost.

It is possible to pay less tax during this intermediate period since you may claim back VAT on costs while not having to charge VAT on revenue during this period.

How to Make the VAT Payment in Actuality

When you file your VAT return, you will be able to see how much you owe in VAT. You’d think that paying the bill would have been the easiest part, yet it may be difficult at times to really pay it off. For starters, you must pay in the currency of the nation in which you are completing your paperwork. And second, certain nations’ tax offices do not allow for the transfer of funds via overseas bank accounts.

To make things simpler, put your money in a separate account for each currency in which you are required to pay tax. Because it might be difficult to open bank accounts in other countries, the majority of individuals prefer to utilize virtual bank accounts instead.

Learn about all of the shipping regulations

When it comes to delivery to consumers in the United Kingdom, Amazon is quite explicit about its procedure.

If you are shipping products directly to the client, please make sure that each order obtained under a distinct order number is dispatched to the customer independently from the other orders. If you split a single order detail into many shipments or mix multiple order id into a single shipment, you will be in violation of the law.

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