# Amazon VAT

Is VAT calculated before or after deduction of Amazon Fee

• ### Payrolling expenses

I understand that VAT is calculated on what the customer acually pays for a product. However, a client is insisting that this is not the case, as Amazon charges thier fee (15%) on the total sale price including VAT and so the client is saying that they only need to pay VAT after deducting the Amazon fee for the product (apparently the client has spoken to other accountants and they have confirmed this).

How I see it is that Amazon is effectively taking 18% as a fee (because they also charge on the VAT element). Can someone just clarify what the correct position is on this?

Eg: Product sale £120 (includes £20 VAT) and so Amazon fee is £120 x 15% = £18, therefore total profit is £120-20-18 = £82

Client is claiming

Product sale £120, Amazon fee is £120 x 15% = £18, VAT is (£120-£18)/6 = £17 therefore total profit is £120-18-17 = £85

Will appreciate any help that can be given.

### Replies (3)

By lionofludesch
21st Jan 2021 15:28

I vote you're right.

There's a sale, there's a commission. They're separate.

Inevitably, he'll go to the accountants who are doing it wrong.

Is there no input tax to recover on Amazon commissions ? I've never dealt with an Amazon seller.

Thanks (0)
By Taxain
22nd Jan 2021 13:30