How to reclaim 6 months of VAT on Amazon Fees when you become VAT registered

How to reclaim 6 months of VAT on Amazon Fees when you become VAT registered

So it’s happed…you’ve hit the £85,000 UK VAT threshold and now you have to register for VAT! That means sale are on the rise but now you will give a sixth of your sales turnover to HMRC.

Don’t worry though, it’s not all bad news…

HMRC say in their guidance around VAT registration that you can backdate claims for reclaiming VAT on goods and services paid before your VAT registration.

How far back can I go?

There’s a time limit for backdating claims for VAT paid before registration. From your date of registration the time limit is:

  • 4 years for goods you still have, or that were used to make other goods you still have
  • 6 months for services

How does this apply to me as an Amazon seller?

One of the main ways you can take advantage of this is by reclaiming the VAT you’ve paid on Amazon’s fees in the 6 months prior to when you became VAT registered.

Until you enter your VAT number in Amazon Seller Central, Amazon will be charging you 20% VAT on all of their fees (if you are a UK based company). That means that all of the following fees have 20% VAT on them:

  • Amazon Seller Fees and Commissions
  • FBA Fees
  • Storage Fees
  • Advertising Fees

How do I work out how much to reclaim?

On Amazon Seller Central there is a page called Seller Fee Invoices where you can download all of your historic titles ax invoices. These invoices show the amount of VAT paid on Amazon’s fees and will allow you to work out how much you can reclaim.

For users of Link My Books, since we are already passing your Amazon fee information to Xero or QuickBooks we can quickly change the tax rate on any fees that were incurred in the 6 months prior to your VAT registration in a few clicks. Get in touch with us at support to arrange this.

About the author

Dan Little
Dan Little
Co-Founder and CEO of Link My Books located in Newcastle, United Kingdom.
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