a simple question with a simple answer....
Amazon sellers output VAT is on gross sales before any amazon fees and commissions?
Client looks to have declared VAT on net amounts received after Amazon fees
undecalred VAT is a six figure number, so just need a sanity check before I give the client the bad news
Replies (5)
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Yes seen this a few times.
Vast majority of the Amazon off takes are not vat claimable so DIYers using money received can get into a big problem very quickly.
Use the payment sheets and the gross vatable amount is ‘product charges, less product refunds’. All of the rest of the line items do not have vat on as Luxembourg etc.
What £100,000 + in undeclared VAT?!undecalred VAT is a six figure number, so just need a sanity check before I give the client the bad news
Might want to check your figures as this would relate to multi-millions in sales.
I had one like this.
4 years of undeclared sales at around £150k per year turnover.
Not making profit as margin was tiny and most cost were amazon fees and postage.
Therefore no vat to claim back.
Classic case of selling £10 notes for a fiver.
Outlined the disastrous position he was in at which point he left and I never saw him again.
SAR done and home in time for the cricket.
I've seen similar things not just with Amazon, but with other payment/settlement sites as well.
Clients bung through settlements with output VAT accounted for, not realising (or ignoring) this is a net figure. More often than not the charges, fees etc on the other side are reverse charge transactions.
So VAT declared is understated and VAT returns, in general, a bit of a mess to correct.