Quick VAT questions

Forum Categories GENERAL VAT DISCUSSIONS Quick VAT questions

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  • #55815

    I am looking for some help with our first VAT return in the UK. We use Quickbooks but there are some scenarios we aren’t sure about.

    (1) Once we added our VAT number, we do not pay VAT on our Amazon or Stripe fees. My understanding is that we should be using 20.0% RC SG (Reverse Charge Services 20%) tax rate in Quickbooks. However, this is causing the Vat amount to appear in Box 4 “VAT reclaimed in the period on purchases and other inputs (including acquisitions in Northern Ireland from EU member states)”. 

    Is this correct as since I never paid this input VAT not sure if we can offset it against output VAT?

    Edited to add – These amounts appear in Box 1 “VAT due on sales and other outputs” as well so they cancel each other out which I’m pretty sure is correct. 

    (2) We sell on Amazon using Fulfillment by Amazon. All stock is stored in the UK, and when we sell on Amazon to Ireland, Amazon deduct the UK VAT, charge Irish VAT (23%) and pay us ex VAT. What VAT rate should we be applying to these transactions? Is it 20% ECG EC Goods Standard?

    Trevor S

    Q1.  This is correct (assuming that they’re not based in the UK).  Effectively with a reverse charge, you are accounting for VAT on both sides of the fees transactions.  You are paying HMRC the VAT on Amazon’s fee income, and then reclaiming the VAT on your fee expenditure.

    Q2.  Amazon as an online marketplace are deemed to be making the sale in Ireland – see guidance from the Irish Revenue: https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part10-special-schemes/vat-ecommerce-rules/vat-ecommerce-rules-overview.pdf

    I would then consider that the zero rating for exports should apply to your income.

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