NETP VAT return after Amazon has deducted sales VAT at source

I have a UK company though live in Ireland, have been trading on Amazon since 2021, though have only recently become aware that I am actually NETP and was required to be VAT registered since my first sale. Amazon have flagged a back-VAT debt which I am happy with, however I have questions about how I am able to handle my VAT return when sales VAT will have been removed at source? + Since this was flagged I have registered for VAT (& ID awarded) and after speaking to the VAT helpline believe that I am OK legally from their point of view as long as all previous VAT is accounted for on my first return; phew! + I need to pay the back-VAT to Amazon before they will start paying monies out again however also I need to account for this somehow on my VAT return. In order to not fall foul of VAT how I am able to show that this has already been paid when I complete my VAT return in April? + Bearing in mind that my first return needs to account for 3 years of sales and purchases, am I able to account for all my costs on the first return, some of which are services and others which are goods? Any help from HMRC would be appreciated.

Hi gorgeousgames
If you are a Non Established Taxable Business and make taxable supplies in the UK then there is no Registration threshold and you would have needed to register after making your first sale.
Please nsee the guidance below:
Non-established-taxable-persons (NETPs) — basic information
In order to account for this VAT retrospectively you would need to account for these on your first VAT return
If the sales you have made are of goods of a value below £135 then it is the responsibility of the marketplace to account for the VAT on your behalf and so if you do not make supplies of goods over £135 then there will be no requirement for you to register for VAT in the UK at all.
We would recommend speaking to the marketplace about this.
Please see the guidance:
VAT and overseas goods sold directly to customers in the UK
Thank you. 

+ I am registered for VAT already as the guidance in both 9.3 and then in paragraph 2.3 state that any taxable supplies require me to be. In addition as my goods are in the UK at point of sale (purchased in the UK), again the requirement here is that I am VAT registered. I am happy with this and am now VAT registered. + I am happy that the marketplace removes all VAT at source, however my question is how to account for this on my VAT return? Does the pre-paid VAT go in to box 4 on the return? Hypothetically based on £1200 of gross sales (VAT removed at source) and £480 in gross purchases would my return look like the following? To me this just looks like I have made an error and without supporting evidence appears to be ripe for a VAT inspection which of course is concerning. Box 1: £200 Box 2: £0 Box 3: £200 Box 4: £80 from purchases + £200 from box 1 which has been prepaid by the marketplace = £280 Box 5: -£80 Box 6: £1000 Box 7: £400 Box 8: £0 Box 9: £0

Hi,

As the marketplace are responsible for accounting for the VAT then you would not include any figues in box1 as you are not charging any VAT to your customers, the marketplace is.

You would recover any import VAT which you have incurred in to the UK by putting the net figure in box 7 and the VAT element in box 4.
As the goods are in the UK at the point of sale, you are making a deemed supply to the marketplace at the zero rate of VAT and so the net figure would be entered in box 6. You can see the guidance below;

VAT and overseas goods sold directly to customers in the UK

For the VAT you have paid over to HMRC in error please report this as an error correction. You can see the guidance here:

Correcting VAT errors on a return already submitted

Thank you.

Hey gorgeousgames, I am facing the same issue and my Amazon disbursements are also stuck. Can you please share any info? I started my business in August 2022 after registering a UK LTD at a physical address where I can receive supplies. Additionally, I was tax-exempted due to the £85,000 threshold until August 2023. Subsequently, I enrolled in the Flat Rate Scheme and have already submitted my first return. Now, Amazon UK has stated that I am a NETP (non-established taxable person) because I am a non-resident and do not have any permanent employees registered in HMRC as PAYE. Amazon is requesting VAT at 20% from August 2022 to the present date. If I pay VAT to Amazon, how can I claim input tax, considering I was not VAT registered from August 2022 to August 2023? Furthermore, I filed my first return at 6.5% in November 2023.