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"After working at Amazon for a few years, I'm almost an expert at minesweeping." This seems to be the voice of many Amazon sellers. Without a strong heart, it seems difficult to deal with various emergencies. At present, the aftermath of the second review of the video is still there, and another storm is about to come. British VAT explosion, many sellers' funds are frozen Recently, many sellers have reported that their Amazon UK accounts have been withheld . Not only that, some sellers are facing the emergency of frozen account funds . After investigation, some sellers speculated that there may be two problems: one is that the value-added tax (VAT) address is registered with HMRC, and the other is that the UK company address is not a real business office address. ▲ The picture comes from Zhiwubuyan Amazon also quickly sent an email statement to the sellers involved in the incident. The email shows that starting from September 1 this year, Amazon has started to withhold VAT on sellers’ B2C sales. It is expected that in the future, some UK accounts with tax-free sales exceeding 85,000 pounds will also be subject to withholding VAT . In addition to withholding, Amazon is also assessing the UK VAT owed by sellers since January 1, 2021 , a process that can take up to 14 days. Although sellers can continue to sell on Amazon, the funds in the seller's account will be frozen until the UK VAT owed is paid to Amazon. But why did the above situation happen? Amazon also gave a corresponding explanation in the email. In fact, it is because according to HMRC records, the seller’s VAT registration number and related address show “HM REVENUE AND CUSTOMS OFFICES, RUBY PLACE, ABERDEEN, AB10 1QZ - HMRC” . It is understood that this is an office address of HMRC in the UK. If the VAT address is found to be registered at this place, according to the UK VAT e-commerce legislation, Amazon will assume that the company is a non-UK local company and all taxes will be withheld and paid as a foreign company. ▲ The picture comes from Zhiwubuyan Sellers have different reactions to this incident: "For sellers who pay taxes honestly, this is good news." "It's so sudden. How come I didn't see any news before? The domestic manager doesn't even know about this. Now I have to abandon the account and start over again." "If the store funds are not enough to pay the taxes owed before, then this account will be useless?" "This wave is a sign of things to come. There has been so much news about VAT in the UK this year, which means there will be big moves." It is understood that there is currently no particularly good solution for sellers whose funds have been frozen, and many sellers are currently preparing to abandon their stores. Some sellers also suggested that if you are caught, you can only pay the owed taxes honestly. If you have not been caught yet, it is best to check for yourself where your VAT address is shown so that you can make corresponding preparations in advance. With stricter policies, it may be more difficult for sellers to apply for UK VAT It is understood that if sellers want to check whether their accounts will be withheld, they can check the tax number through the UK official website (https://www.gov.uk/check-uk-vat-number) to check whether the HMRC address can be seen . If the HMRC-related address is displayed, the risk of withholding will become very high. If the address displayed is not an HMRC address, the seller must log in to the gateway account and check whether it shows "non uk company" in the background . If it shows "non uk company", it is possible that Amazon will withhold the payment. In addition, some sellers reported that their VAT certificate address was the address of a UK company, but they were still withheld. It is understood that such situations should be based on the "non UK company" or "UK company" in the gateway backend . According to current information, once the seller's VAT address shows HMRC, it is highly likely that the HMRC address cannot be changed to a UK company address . Therefore, if the seller finds that his account is at risk of being frozen, he may need to transfer the warehouse and withdraw cash as soon as possible to reduce losses. Many sellers have reported that it is much more difficult to apply for UK VAT on Amazon this year compared to the past. The turmoil caused by this incident seems to suggest that it may become more difficult for sellers to apply for UK VAT in the future.
According to data from the UK's HM Revenue and Customs, VAT accounts for 15.3% of the country's tax revenue, equivalent to £5,700 per household, accounting for 6.3% of national income . VAT in the UK is an important source of tax revenue for the UK government, and related policies are becoming increasingly strict. As early as January 1 this year, the UK Revenue and Customs Administration introduced late payment penalties and late submission penalties based on points. This replaced the previous VAT default surcharge, and the policies on late payment penalties, late payment fees, interest calculations, etc. changed greatly. Relatively speaking, the penalty method has become more complicated. In addition, there is an important change in the UK VAT this year. Starting from May 22, HMRC's VAT registration hotline will no longer provide services . This is a big blow to domestic Amazon sellers who are mainly registered as British companies. The difficulty in information communication between the two parties is likely to extend the registration and review time and delay the sales of the store . In addition, some sellers will choose to apply for VAT through service providers, and the quality of service providers will also affect the application situation to a certain extent. In addition, the British tax authorities have updated their systems and made corresponding changes to the registration process and the number issuance process, which has also extended the time and efficiency of VAT issuance in the UK. Overall, this storm is not groundless. Sellers need to pay attention to the changes in UK VAT in a timely manner. As the peak season is approaching, the storm is getting stronger and stronger. What do sellers think about this? Welcome to discuss in the comment area~
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