VAT reclaims for NETP marketplace sellers

Hello, I am the owner of UK LTD, a company that sells on Amazon.co.uk and is not established in the UK as NETP. According to Amazon's information, it is the marketplace's responsibility to collect NETP sellers' VAT and forward it directly to HMRC. In this case, we will no longer have the accounting situation of deducting the output VATs from the input VATs and paying the remaining VAT debt in order to forward it to HMRC. However, without doing this accounting, if Amazon pays the output VAT directly to HMRC, the input VATs will only be reclaimed from HMRC after 3 months accounting period, and this will cause a big problem for our cash flow. In other words, we have to carry input VATs as an expense for 3 months. Since Amazon does not accept flat rate scheme as an option, we are quite worried about how to overcome this situation. I would like to know if HMRC can issue VAT refunds on a monthly basis. In the scenario where we are a NETP and registered with VAT, why can't we do this accounting ourselves? Thank you in advance for your help and advice. Kind regards.

When an item is sold on the Amazon marketplace, you (the UK Ltd) make a zero rated sale to Amazon and then Amazon make the final sale to the customer and Amazon charges UK VAT and Amazon declares this to HMRC. So your UK VAT return would in simple terms for a sale via Amazon, the return would have Nil output tax to declare in Box 1 (zero rated sale to Amazon) and net value of sale in Box 6, and your inputs would be the VAT on purchases you incur in the UK and your postponed VAT statements (or C79's) where you import goods into the UK. You can request monthly VAT returns, you do this via your government gateway/VAT portal with HMRC (where you can also see your historical VAT returns, payments and your postponed VAT statements). Monthly returns is not an automatic right, so HMRC can reject a request if they believe there is a risk. More details - https://www.gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg33450 The online marketplace is responsible for collecting VAT where the seller is an NETP because so many NETP's charged VAT but failed to pay over to HMRC or just didn't charge VAT at all and undercut VAT registered traders, these rules were implemented across the UK and EU a few years ago.

Hi Mert Kaan GUNDOGAN,
If a business will be receiving repayments of VAT, then they may apply to change their VAT return stagger to monthly VAT returns rather than quarterly.
This can be updated in the Business Tax Account in the section “Mange Your VAT” and “Your Business Details”.
For guidance regarding selling goods located overseas via an online marketplace and how VAT is then accounted for please refer to the guidance here:
VAT and overseas goods sold to customers in the UK using online marketplaces
Thank you.