BREAKING: Amazon VAT Changes To Crush UK Sellers from 1st August 2024! (Amazon FBA UK)
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- čas přidán 30. 05. 2024
- Amazon FBA UK sellers are about to get CRUSHED by new VAT changes that have just been announced by Amazon. From 1st August 2024, Amazon is changing the way it invoices VAT to Amazon FBA sellers and it is going to cost new Amazon sellers thousands in lost profits.
In the past, all Amazon fees (with the exception of Sponsored Ads) were invoiced by Amazon Luxembourg under the reverse charge VAT scheme. This meant that new sellers could avoid VAT on Amazon fees by declaring Amazon FBA VAT exemption. Some sellers even applied for an Amazon FBA VAT refund if they had previously been incorrectly charged VAT.
Amazon is changing this process and will invoice sellers from Amazon branches within each country instead. This means that the reverse charge scheme will no longer apply and fees will have VAT applied. Previously exempt Amazon UK sellers will now see their Amazon fees subject to 20% VAT, this is likely to hit profits by approximately £1-£2 per unit.
For VAT registered sellers, this new change does not really make much of a difference as you can claim the VAT back.
However, new sellers should avoid the temptation to register for VAT early to claim back these fees. It is still more tax efficient for Amazon FBA beginners to delay becoming VAT registered until they hit the £90,000 threshold.
Although they will now need to start paying VAT on Amazon fulfilment fees and Amazon referral fees, they will still avoid having to incorporate 20% VAT in their sale price, which would hit profit margins much harder.
Here is the announcement from Amazon regarding Amazon VAT VAT exemption:
Update to Amazon UK and EU agreements and VAT treatment
Effective August 1, 2024, Selling on Amazon, Fulfilment by Amazon, and all other services currently supplied by Amazon Services Europe S.à r.l. (ASE) will be supplied by Amazon EU S.à r.l. (AEU). All agreements, policies, terms and conditions currently referring to ASE, including Amazon Payments agreements, will be updated to AEU. Additionally, all invoices issued by Amazon will be issued by AEU instead of ASE after August 1, 2024.
If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply and VAT will be deducted from Amazon fees. In the majority of cases, we expect that you will be able to recover this VAT through your normal VAT return process.
We recommend that you contact your tax advisor for more information on recovering VAT as per your country of establishment's local regulation.
If your company is not established in the countries listed above, you will be invoiced by the AEU head office in Luxembourg, and there will be no change to how VAT is applied on Amazon fees.
What do you think of this announcement? Will it stop you from starting Amazon FBA UK in 2024? Let us know in the comments below! !
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This is a great video recap of issues facing new sellers and their cash flow due to the VAT in the EU.
Great video as always!
As a new seller who is vat registered but still under the threshold, do I still incur the fees and cant claim them back?
Hi Darren , I’ve been listening for years . love your channel ❤. How about now , after the nee vat changes, doing a video on those close to the 90k threshold ? Say taking a £25 product, and doing a before and after august 1st if you were v a t registered. It will help a little after aug ?
Hey Darren, surely it is now better to register for VAT if you are under the 90k threshold ,since you can claim it back, whereas if you are VAT exempt you cant?
Does this only apply to FBA and not FBM?
can i get VAT back from my ppc spends when VAT registered?
So there is no way out of this when doing your tax return? Great, was just about to order a new product!
You don’t claim anything back. It just goes against your vat bill to lower it.
How do you find this information Darren does Amazon post this information?
Yes they do, it posted on the seller forum
More greed incoming.
I miss the days of having to go into town for stuff. Bring these days back.
How does the affect the Chinese sellers if at all?
I don’t think it does 😂
I didn't get it properly. Now i am Vat exempted. Do i have to pay vat on refrel fee and fulfillment fee after August?
Yes unfortunately. I'm same
@@asimhd1990what if you request again to be BAT exempt
Does this affect you if you sell in the US as well from the UK? [UK seller] We have inputted our VAT numbers in our US store and since doing this it stopped the VAT on fees in the US, do you think from August US fees will start having VAT back on them, or is this only affecting UK SS accounts?...
Hi, Can you help me in shipping from UK to US ? please guide how to ship from our UK warehouse to Amazon US
I didn't get your point
I think this will push up product prices overall
No doubt.
Thank God for that. When doing my profit calculations on selleramp I was wondering how these guys make a good profit on their products at the prices they sell for. Then I realised I was factoring in the seller fee vat costs. I'm glad it'll be a level playing field now
Sir, plesse explain one thing that either the vat is on fba and refferel fees, or total profit or total sales? Thanks
fba and ref fees
what if my company is in the UK and I sell ONLY in the US? will my FBA fees in the US will be with VAT now?
I'd like to know this too. Am selling amazon USA but am from the UK
@@scully8899how are you doing this? Prep Center ?
No there is so such thing as VAT for the USA. Only this stupid country called the UK. So no is the answer
Hi, Can you help me in shipping from UK to US ? please guide how to ship from our UK warehouse to Amazon US
When is it ever good news with fba?? I quit last year but goodluck to the rest of you 😄
Good luck, you'd better talk to an accountant instead of listening to Darren.
this is actually good because it kinds of wipes out all the unserious sellers