Selling via Online marketplace - VAT Return

Hello, I'm registered for VAT and sell products on Amazon to consumers in the UK. As an overseas seller without a presence in the UK, Amazon, the online marketplace, has taken on the responsibility of collecting and remitting the applicable VAT on my behalf. They've also displayed the VAT collected on invoices. However, I'm unsure how to report the sales amount and VAT on my VAT Return. a. Since Amazon has already collected and remitted the VAT to HMRC, I believe I don't need to report it in box 3 or pay the VAT myself. b. Do I still need to report the total sales amount without VAT in BOX 6? Or should I report the total sales amount, including the VAT paid by UK consumers, in BOX 6? c. Amazon charges me fees for their services, such as sales fees and processing fees. Since my company hasn't established a presence in the UK, and I contract with an Amazon entity that does not operate in the UK, Amazon shouldn't be charging me UK VAT and there is no need to report these fees in Box 7, correct? Thank you.

When a customer buys the goods from Amazon, yes Amazon collects the VAT and pays this to HMRC, but behind the scenes, you first make a sale of those goods to Amazon, that sale is zero rated. So you would record the net (before VAT) value of the sale in Box 6 (sales excl. VAT) and £nil in Box 1 (zero rated sale). Amazon should not charge VAT on their admin/service fees to you, you would have to apply reverse charge to their invoices, https://www.gov.uk/guidance/vat-and-overseas-goods-sold-to-customers-in-the-uk-using-online-marketplaces "When the goods are sold to the customer, the overseas seller will be considered to have made a zero-rated supply of the goods to the online marketplace, known as a ‘deemed supply’. The overseas seller does not have to issue invoices to the online marketplace for deemed supplies that are considered to be zero-rated."

Hi,

Are the goods sold via the marketplace stored in the UK prior to being sold to your customers or are the goods sent directly from overseas to the customers' address?

Thank you.

Yes, the goods sold via the marketplace has been stored in the UK warehouse prior to being sold to UK customers.

Hi Andrea Taylor,
Please refer to the guidance here:
Goods that are in the UK at the point of sale
The online marketplace will declare the VAT on the sale to the end customer on their VAT return, this does not need to be declared on your return. However, as you would still be responsible for the import into the UK, you will have a deemed zero-rated sale of the goods imported into the UK to the marketplace which you will need to declare on your VAT return.
As zero-rated box 1 will be 0.00 and the net value will be declared in box 6.
Any import VAT you are reclaiming subject to normal input tax rules would be declared in box 4 and the net value of the import in box 7.
For guidance regarding VAT on services supplied to you please refer to notice 741a:
Place of supply of services (VAT Notice 741A)
In particular sections 6.3 and 6.4.
The supplier would need to determine whether UK VAT is due on their supply.
Where the place of supply is determined to be outside the UK then no UK VAT would be accountable on the supply as this is outside the scope of UK VAT.  
Thank you. 

 

Does the same apply on UK registered business?. If the UK registered business sells via Amazon and Amazon collects and remit VAT to HMRC, do we disclose 0 in box 1 and net sales in box 6 (zero rated sales)?

Hi,
If a UK business which is established in the UK sells goods via the marketplace then the business will account for the VAT on the sale to the customer.
The marketplace will only take responsibility for the VAT where an overseas trader either sends the goods of a value below £135 from overseas or the overseas seller sells goods of any value from a marketplace warehouse in the UK of any value.
Please see the guidance below:
Changes to VAT treatment of overseas goods sold to customers from 1 January 2021.
Thank you.

Thanks. My company is based in the UK and we charge VAT to our customers however, Amazon without VAT and remit to HMRC. I think we should be declaring zero rated sales in our VAT return as Amazon had already remitted VAT to HMRC?

Hi ,
 

I would discuss this with the platform as if you are a UK established business and you are selling goods in the UK then the pllatform would not normally account for the VAT on your behalf. You would normally only make a supply to the platform at the zero rate of VAT where you are an overseas trader and the platform are selling goods from a warehouse to consumers  in the UK on your behalf. Please see the guidance below:  Goods in the UK at the point of sale — sold by an overseas seller through an online marketplace  . Thank you .

Hi, what if the company is uk based but its goods are imported from overseas. It also has its own warehouse in the uk and stores its goods. It is Vat registered and has mixed sales(marketplace and directly to customer). The customer invoice on the goods sold on marketplace shows no vat but the ones sold directly by the seller shows Vat. Do they need to include the sales made on marketplace as normal sale and pay vat or just treat it as zero rated sale assuming the marketplace has paid the Vat on sellers behalf and only include the net figure with zero vat on the return

Hi.

If a UK company which is established in the UK sells goods that are in the UK at the point of the sale via an online marketplace
then the UK business will account for the VAT on the sale to the customer.

So, if the goods you refer to in your question were in the UK at point of sale when sold on the online marketplace then yes,
the UK VAT registered business should be accounting for VAT on the sales.

Guidance regarding when an online marketplace accounts for the VAT can be read here:

Charging VAT when goods are sold if you're an online marketplace operator   .

Thank you .