Established in the UK for VAT purposes

Good day, I recently received an e-mail from Amazon stating they have started collecting and remitting VAT on my B2C sales because they have concluded that my company is not considered as established in the UK for VAT purposes and that they are in the process of assessing all UK VAT owed since 1 January 2021. The reason is "the address associated with your VAT Registration Number is HM REVENUE AND CUSTOMS OFFICES, RUBY PLACE, ABERDEEN, AB10 1QZ" For reference: - My company is incorporated in the UK - My company is UK VAT registered and the 1st VAT return is due on 7 October 2023 - My company is used to sell products online to UK customers via our brand website and Amazon.co.uk marketplace - I run the company remotely from Portugal, the principal place of business address on the VAT certificate is my home office in Portugal. I have no physical presence in the UK, hence why the HM Revenue and Customs office address was used. - My VAT certificate states nusiness type UK Company (with UK establishment) In conclusion, I'm trying to ascertain whether they are correct or not? Is my company established in the UK for VAT purposes or not? And if so, what proof can I use? My biggest concern is that they are calculating all VAT on sales since 1 January 2021, yet we only registered for VAT on 1 April 2023 when we reached the threshold. Thank you!

Ruby Place (Aberdeen) is the address used for non-established businesses who require a UK VAT registration, so the fact your VAT registration is shown as being at Ruby Place confirms that you are a non-established business. The Ruby Place address was formally known as the NETPU (Non-Established Taxable Persons Unit) and this team processed registrations for foreign businesses. If you (Director) are resident overseas, there is an argument that the UK company is not established in the UK on the basis establishment can mean physical presence such as an office or employees but also where the control of the business is and if you as Director are not UK resident, then the UK entity is under foreign/overseas control. Suspect that as your principal place of business is Portugal, this is why you have the Ruby Place address. You may be best to contact the HMRC via email vatchangeofcircs@hmrc.gov.uk or vrs.newregistrations@hmrc.gov.uk on the basis you've not filed a VAT return as yet. Explain your situation and await a reply, it might take several days/weeks so be patient. If you are UK established, you have £85k of turnover before you need to register for VAT, if you are not UK established then the threshold is Nil. Amazon see you as non-established due to your address. Amazon are responsible for collecting VAT where a trader sells on their platform and is not VAT registered, this responsibility was with effect from 01 January 2021. You should contact Amazon and explain your situation to them, a lot of Amazon is AI/automated processes and so where things are a little different, their systems don't work so well. If you've already sent them your VAT certificate (with the Aberdeen address), then you're going to have to deal with HMRC first.

Hi.
If you are selling goods from overseas under a value of £135 and you are selling these goods via a marketplace then the marketplace will be responsible for accounting for the VAT on your behalf.
Please see the guidance below:
Changes to VAT treatment of overseas goods sold to customers from 1 January 2021
If the value of the goods are over £135 and you are the importer of the goods and the goods are distribued by a marketplace from a wharehouse in the UK then the marketplace will again be responsible for the VAT.
In order to establish whether you are a Non Established Business please see the guidance below:
Non-established-taxable-persons (NETPs) — basic information

Client had something similar. I would like to state that considering the business has filed and paid already 3 years of VAT since brexit, directly. What then happens? As amazon do not seem to care about that and are requesting they now receive the full 3 years of already paid vat, which they will pay back to HMRC, and then say we need to request our own refund back with HMRC for those 3 years of paid vat returns! Feels overly confusing to me to go through this challenging triangle when it has already been paid and accounted for with proven VAT returns. Furthermoe, Amazon froze clients cash disbursements until settled, so they cannot even get the money from balance they have to help. In such a case, are HMRC willing to refund the business first 3 years in advance so they can pay it to Amazon? Otherwise, how can it be possible to have to hand 3 years' large vat total to once again pay to Amazon a 2nd time and immediately? It would destroy the business as there is no way possible they have the total sum in cash flow readily available and there are ongoing business payments due including stock balances for 2024. It is quite a worry when Amazon have not once discussed this in 3 years or made them aware. Thanks.

Any update to this?

Hi,

You would need to speak to the marketplace regarding this.

Marketplaces are responsible for accounting for the VAT when they are facilitating sales of goods on behalf of non established businesses to individuals in the UK.

If the goods are outside the UK when the sale is made then the marketplace is responsible for the VAT where the value of the goods is below £135 and are also responsible in accounting for the VAT on any value goods where the goods are in the UK when sold, for example in a warehouse.

It is important to establish whether the company is a non stablished business and communicationg this with the marketplace.

If the VAT has been accounted for incorrectly by a business and the marketplace should have been accounting accounting for the VAT then an error correction would need to be completed by the business.

How to correct VAT errors and make adjustments or claims (VAT Notice 700/45)

Thank you.