Amazon VAT: How to Register Step by Step?

Driven by huge profit, you dare to venture into Amazon, determined to succeed. However, as an Amazon seller, you might often be confused with some jargon, and unclear about VAT (Value-Added Tax).

How to apply and pay for VAT via Amazon? Let’s move on! This article will tell you everything about Amazon VAT, which is helpful for selling on Amazon.

Amazon VAT: What Does It Mean?

VAT stands for Value Added Tax, which is originated from France. It is a tax widely applied in European countries, which reflects the profit margin of products and services. It is also known in some countries, including Australia as GST (Goods and Services Tax).

Bear in mind that each Amazon seller is responsible to ensure they are VAT-compliant and they should resort to a professional consultant if uncertain about the obligations.

From the date of registration, you have VAT responsibilities as follows:

·Charge the right amount of VAT

·Pay any VAT due to HMRC

·Submit VAT returns

·Keep VAT records and a VAT account

Amazon VAT Rates

VAT is charged at the time of a sale/transaction. So far, there are three VAT rates, namely, 0%, 5% (low), 20% (standard).

Items eligible for 0% VAT rate include books, children’s clothing, children’s footwear, safety equipment, grocery items, and so on. (The delivery address must be within EU).

Some product categories have a special, lower VAT rate of just 5%, including children’s car seats, radiators, gas/oil fired boilers, solar panels, water and wind turbines, etc.

Standard VAT rates of around 20% are levied to almost all common products and services.

Do You Need to Register for VAT in the European Union?

The key factors which determine your obligation to register for VAT are the country where your business is registered, the location of your inventory, and your level of sales.

1. If your business is established in the UK, you store goods in the UK, sell them to consumers in the UK, and the sales go over the UK domestic threshold of 85,000 euros. Moreover, you may also need to register for VAT separately in other EU countries if you sell products to customers in other European countries.

1. As for businesses established in a European country other than the UK, if you store goods in the UK or sell to UK-based consumers (non-business), and your income exceeds the UK distance selling VAT threshold of 70,000 euros.

1. As for businesses established outside the EU, you need to register for VAT in the UK if you sell goods stored in the UK to customers in the European Union. Extra VAT registration is needed if you sell goods to consumers in other EU countries.

What Documents Are Required for VAT Registration?

It is easy to register for VAT in the United Kingdom; however, you’ve got to prepare related documents for the application:

① Business license, the legal’s passport or identity card (All content must be translated into English and stamped with official seal);

② Other documents and a letter of attorney, including form 64-8, sales sheet, C79. If you’re filing for zero declaration, you need to submit a “zero declaration” letter.

How to Register for VAT in the United Kingdom?

There are two ways to register for VAT, namely, online registration and offline mail.

Online Registration

Visit the official website of HMRC to register a Gateway Account. You can keep track of the whole registration process and join the Flat Rate Scheme (FRS) and the Annual Accounting Scheme (AAS). Additionally, you can also apply for an EORI number and declare import VAT, but they require more documents.

Offline Mail

You can complete a form to send it to HMRC to finish the registration. After HMRC sends the information for the registration to your Gateway Account or inbox, you can declare and pay for the tax. If your information is complete and accurate, HMRC will mail the VAT clearance certificate to your business address. At last, you can declare VAT according to the information.

Register for VAT Step by Step 

1. Visit Amazon UK, click “Money and Tax” to access HMRC;
2. Click “VAT” and “VAT Registration” to start the registration;
3. Click “Next” to create a Gateway user ID, which will be used as a tool to deal with tax issues for only a specific tax);
4. Fill in your name, email address, password, and so on;
5. Select either “Sole Proprietor” or “Corporate Body” according to actual circumstances;
6. As for why you register for VAT, just choose “Making or intending to make taxable supplies”;
7. Fill in the contacts, your address, etc.;
8. On the page of “About you,” choose “I do not have a National Insurance number.” Then, select a country, “China” and enter “Tax identification number”;
9. Fill in the address of your residence, and add a postal code;
10. The next step is to verify the period of your residency;
11. Make sure to add your country code when you fill in the blank of contacts;
12. As for the business address, it is for postal correspondence. It’s recommended to make it consistent with your residential address. As for the property, choose “No”;
13. Confirm your business contacts;
14. Fill in the actual sales and details of VAT;
15. Select the industry for your business;
16. Confirm the information that you provide;
17. Enter the predicted turnover, and you can choose “YES” to apply for an EORI number;
18. Confirm the tax rate, tax-paying cycle, and payment;
19. Upload related documents to finish the VAT registration.

You should check your inbox and registered mailbox regularly in case you’re notified by HMRC to provide more information. Generally, you can complete registering for VAT within about 6 weeks. After the successful registration, HMRC will send the VAT number to your email address and Gateway Account.

Subscribe to SaleYee Blog for more useful business resources and tips to sell online!