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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5112
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
Type Your Tax Question Here... is online now

Hi We sell clothing on ebay and Amazon, were in the UK,

Customer Question


We sell clothing on ebay and Amazon, we're in the UK, we've just registered for VAT1.6.13. I have 2 questions.

1. The money we receive from Amazon are net of their fee, so should we be paying VAT on the total sale ? If so, that means we are paying VAT on money we haven't actually received? Amazon do not charge VAT on fees (Luxembourg) so we cannot claim any VAT back. The same question applies to our ebay sales, we receive funds less the paypal fee, which again Paypal does not attract VAT. Ebay fees include VAT so we can claim VAT on those.

2. For both Amazon and ebay, should we be charging VAT on our shipping charge? RM do not charge VAT on all postal services, just some e.g. Special Delivery.

Please can you confirm.

Thank you

Submitted: 4 years ago.
Category: Tax
Expert: replied 4 years ago.

Hello, if you have any questions or need further clarification after reading my answer please let me know.


Thank you for your question...


The customer pays you a price inclusive of VAT if you are VAT registered. You should account for that as VAT output in your accounts and VAT returns.


The charges (fees) from Amazon for the service may or may not have VAT charged on it. In the event there is VAT charged to you then you claim it as VAT input in your books of account and VAT returns.


You have to treat these as two separate transactions notwithstanding the fact you receive the net amount from Amazon/ebay after their fees has been deucted from total sale value.


VAT on delivery charges -


If delivery is free or the cost of delivery is built into the normal selling price, then VAT is accounted for in the normal way i.e on the total invoice value.


Normally, you would charge VAT on shipping charges if you are VAT registered.


For better understanding of VAT treatment under different circumstances, please look at sec 2 and 3 of VAT Notice 700/24 (April 2003) here


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Expert: replied 4 years ago.
Hi Julie


I notice you have viewed my response to your original question on accounting for VAT on sales through Amazon where monies received are after deduction of fee (JACUSTOMER-5ow72ccw- Last Viewed on 28/07/2013 at 18:57).


Just checking to see if you have any issues relating to your question that I may not have addressed. Please let me know if I can be of further assistance.


If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.