Discrepancy between the VAT amounts to be refunded and the VAT amount to be paid to Amazon

Hi, A UK LTD company selling on Amazon was recognized as a NETP a few months ago. The company has been VAT UK registered since 2020 and paid VAT on sales to HMRC on its own. After Amazon recognized the company as a NETP it demanded payment of VAT which it calculated for the period from 2021 to 2024. The company wants to reclaim the amount of VAT paid to HMRC before paying VAT to Amazon. After calculating the amount of VAT paid on B2C sales for this period based on sales statements, it turned out that the amount calculated by Amazon is approximately £16,000 lower than that resulting from the sales statements. Amazon does not want to share the calculations based on which it calculated the amount. Can a company apply for a VAT refund based on its calculations even though they are not consistent with Amazon's calculations? Thank you in advance!

Hi Emma12,
If you have been accounting for VAT incorrectly as a UK established business then you will need to correct this as an error correction.
Please see the guidance below:
4. Correcting VAT errors on a return already submitted
You can only do a correction for the VAT which you know you have overdeclared by as this would be your responsibility, not the responsibility of the marketplace.
It will be the responsibility of the marketplace to account for the VAT correctly from 2020 and going forward.
Please make sure that we have the correct address details for you and that we have the correct status for you as a NETP.
If there is any doubt with your status please contact as at:
isbcvatestablishment@hmrc.gov.uk
Thank you. 

 

Hi, Surely Amazon should only be claiming for the amount of VAT they should have collected AFTER you became a NRTP ? Before this date you have been correct in your Accounting ........

We have a similar situation and are tackling it in the following way. Amazon provided the following: 1. Transaction statements 2. Pay out statements 3. VAT demands based on alleged Amazon sales. We are left with figures at 1, 2 and 3 above which do not agree with each other. We are therefore left with no choice but to rely on pay out statements from Amazon as these figures appear in our bank account. The original VAT returns were completed based on transaction statements which do not agree with pay out statements but at least from our point of view the pay out statements agree with monies received by us. We now have a situation where Amazon's VAT demand does not agree with the figures they have already paid us. We are therefore now in a situation where we are challenging Amazon to prove their figures. In the meantime, we are claiming a VAT refund from HMRC on a quarterly basis, based upon VAT overpaid for each quarter for the last 4 years. The amount of the refund from HMRC could exceed £500,000.