Last month, Amazon UK made an urgent announcement in Seller Central. It stated that the new UK Finance Bill was expected to become law shortly, and that Amazon would have to block all non-UK sellers if they do not comply with UK VAT registration requirements. It said urgent action was required.
If your eyes went wide at the mention of VAT, and you had a little panic, don’t worry: you probably weren’t alone. The words Value Added Tax (VAT) immediately bring about confusion and complication for many multichannel sellers. VAT doesn’t need to be complicated. Even if you’re selling on multiple places like Amazon, eBay, or your own webstore.
The basics of VAT compliance and registration – what you need to know
Understanding if you need to be VAT registered or not isn’t as difficult as it might seem.
If you’re in the UK: If you’re storing goods and selling to UK customers, you need to register for VAT if you sell more than £85,000 of goods.
If you’re selling into the UK from another EU country: You need to register for VAT in the UK (and not just your home country) if your sales into the UK exceed more than £70,000.
Even if your sales don’t exceed £70,000 you may still need to register for VAT.
Any EU seller who holds goods in the UK: For example, if you use Fulfilment by Amazon and their distribution warehouse in the UK, needs to register for VAT, even if you don’t reach the £70,000 threshold.
If you’re outside of the EU: There is no threshold for sales, but if you store any goods in the UK that you sell anywhere in the EU, you will need to register for VAT.
Why you need to add your VAT number to your Amazon account
The new UK Finance Bill – which received Royal Assent on 15th March 2018 – places a much heavier emphasis in cracking down on overseas sellers who have not been paying their fair share of VAT. You can see the details here.
It holds marketplaces like Amazon ‘jointly and severely liable’ for all of the VAT owed by non-UK sellers operating on their platform. If the sellers don’t pay, Amazon has to. As you’d expect, Amazon doesn’t want to be responsible for any payments, so they are cracking down on overseas sellers themselves. They say that if you should be VAT registered and you don’t include a UK VAT number in your account, then that account could be suspended.
ChannelGrabber supports VAT registered multichannel sellers
Once you have VAT registered in the UK, you’ll need to ensure you have VAT compliance across all your invoices. For every sale you make in the UK (or in another country if you’re registered for VAT there too) you’ll need to include all the relevant VAT details.
ChannelGrabber makes it as simple as possible. It automates your invoices and streamlines your order processes – wherever your VAT registeration applies. With ChannelGrabber, you can:
Easily add a UK VAT number
Just go to your account, turn VAT on (if it isn’t already) and select GB. Then add your VAT number.
Add VAT numbers for each of your registered countries
If you’re an established eCommerce business, you’re likely selling in multiple EU countries. Therefore, you may need to cover VAT registration for several of them. In your ChannelGrabber account, simply select the relevant country code to add multiple VAT registration numbers.
Add different VAT numbers for different companies
If you use your ChannelGrabber account for different trading companies, you can add a VAT number for each of them separately too. Just manage your existing company in your account, toggling “Use legal company VAT” to OFF, and “VAT registered” to ON.
So, once you’ve added all your VAT numbers, the country’s VAT will apply to whichever channel your order comes through automatically. In any case, this is based on the buyer’s location.
You don’t need to worry about a thing.
For more information on how to use VAT in ChannelGrabber, take a look at our full, uncomplicated guide on VAT Compliance.