Selling on Amazon as a non-UK company just got trickier!
Here’s the deal: Amazon just hit non-UK sellers with a new VAT headache. They now want 20% VAT from everyone, no matter how much you sell. This is a bummer for many sellers, messing with profits and creating confusion.
But fear not! We’ve got some ideas to help you navigate this new situation:
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Team Up with a UK Buddy: If you haven’t hit the big £85,000 sales mark yet, consider finding a partner in the UK. Give them a majority share (over 50%) in your business, and you might be exempt from VAT until you start raking in the sales. Just make sure your partner is someone you trust and who can contribute to the business!
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Sell Your Company (or Shares): Already crossed that sales threshold? Adding a UK director might not be the answer. Instead, you could sell your entire company or all your shares to someone living in the UK. This way, you’d be VAT-compliant without any confusion.
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Start Fresh with a New UK Company: Another option is to set up a whole new company in the UK, with a UK resident holding more than half the shares. Then, you can move your Amazon account and business over to this new company. This way, you’d be exempt from VAT until you hit that £85,000 mark again. Just be aware, this involves a bit of legal mumbo jumbo and paperwork. Talking to a tax advisor or lawyer can help you navigate this smoothly.
Here’s a bit of backstory on this whole VAT mess:
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The Taxman Was Watching: The UK tax authority (HMRC) has always wanted sellers on Amazon to pay 20% VAT on their sales. But Amazon wasn’t really enforcing it before. Sellers were usually responsible for paying VAT to the government themselves, either every year or every few months.
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Amazon Changed the Game: Now, Amazon is taking matters into their own hands. They’re collecting that 20% VAT directly from sellers and sending it to the government. This caught a lot of sellers by surprise, especially since some already paid their VAT. Plus, Amazon didn’t exactly explain things very clearly.
The bottom line: Dealing with Amazon’s new VAT rules can be tricky, but there are ways to stay compliant and keep your business running smoothly.
Whether you team up with a UK partner, sell your company, or start fresh, talk to a tax or legal pro to choose the best option for you. Stay informed and adapt as needed to keep your Amazon business thriving!
