2018-08-27

Amazon and VAT look, err, fun

Obviously, selling things through Amazon, we have to make our accounts work. Normally we would invoice and charge and ship, but with Amazon FBA, all of that is done by them. With us shipping, we still have the issue that Amazon have charged the customer so we are just shipping.

Thankfully Amazon allow various reports, and there appear to be two.

One report for orders we have to fulfil or have fulfilled.
One report for orders Amazon fulfil.

Not the same format!

Both are tab separated files, but one has headers like sku, product-name, quantity-purchased and one has basically the same fields with headers SKUTitleDispatched Quantity. It was not too hard to handle that, but rather silly.

VAT inclusive/exclusive.

We have several orders and most list the item-price (e.g. 6.00 for a pack of cards) and the item-tax as 0.00. However, on the report fulfilled by us, one person was listed as item-price 6.00 and item-tax 1.00. I.e. the item-price is inc VAT. I can only assume they are a VAT/business customer.

However, on the fulfilled by amazon, we have some items listed 6.00 Item Price and 0.00 Item Tax as above, but some listed Item Price 5.00 and Item Tax 1.00. I.e. the Item Price is VAT exclusive when there is VAT.

The same logic seems to apply to Delivery and Gift Wrap values.

Just to add to the fun, when purchasing two items, the *ITEM* price is in fact the total price, not the per item price.

I'd like to thank our customers for providing such a fun range of possibilities so I could work out what was happening.

Amazon fees

It looks a lot like the fees Amazon charge have no VAT invoices. This is a tad confusing. It seems they don't charge VAT as long as we have provided a VAT number, which fits with how EU works now, but I was under the impression a formal tax invoice stating that was still needed. Also, as the services I am buying are in the UK, I am a tad at a loss as to why there is not VAT as normal even if they are not a UK company. I am not having a lot of luck working it out. I may ask HMRC to explain it. Facebook seem much the same, no sign of a VAT invoice from them if you advertise on Facebook. At the end of the day if they charge VAT we reclaim it from HMRC and they pay it to HMRC so it is academic - apart from when it is not clear if the price quoted has VAT or not.

However, if so, the control pages are especially annoying - well, infact, plain wrong. For example a pack of cards sold at £6.00.


It says £6.00, with two Amazon fees of 90p and 80p and then says net proceeds excluding VAT of £4.30. I had assumed it was in fact £4.30 inc VAT, i.e. the £6.00, 90p, and 80p were all VAT inclusive figures, but it does state £4.30 exclusive of VAT!

However, the sale price of £6.00 means we pay VAT of £1.00, and it seems the 90p and 80p have no VAT to reclaim, so actually the net proceeds are £3.30 excluding VAT and not as stated £4.30.

As it happens, at these quantities, the cards cost more than £3.30+VAT. I thought I was covering costs, and now I realise I am not quite. One reason these are somewhat of an experiment in selling via Amazon - get it all sorted and understood with small value items like this.

The main thing is we have imported the data to create the VAT invoices on our systems for the sales and ensure we are paying HMRC the right VAT due.

It gets worse!

I checked it all added up, which is fine, but then I realised that there was something amiss. One of the figures on the statement is "Other (shipping & gift wrap credits)" with a value of £8.49, but on only one item has someone paid postage and they had paid £4.49, so where was the extra £4.00 from?

What was especially odd is the totals added up - the total sales figure, plus this £8.49, added to the total invoices I had imported. I went through checking there was no gift wrap or other shipping charges. There was not.

So juggling with what added up - if I total the Item Price and item-price from the two reports I do get the same total as they show on the statement. Good, so where is my £4.00? Well, it is the three orders that had a separate Item Tax not included in the Item Price column (four packs of cards in total).

WTF? That means they are including the VAT charged, but only where separately itemised, in the "Other (shipping & gift wrap credits)" figure on their statement.

I think my accountant will have a nervous breakdown after seeing this.

P.S. They do provide an "invoice" for the advertising charges only, which says "(includes applicable VAT)" on it, and says "This is not a VAT invoice" and does not say what VAT rate, country, or amount has been charged. FFS

P.P.S. Amazon actually sent invoices! And have out VAT number and state £0.00 VAT!

6 comments:

  1. Yeah could you imagine a company that makes getting a VAT invoice a pain in the ass and puts in silly rules...

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    Replies
    1. I can only guess you are talking about us (A&A) - yes?. The is no issue with a VAT registered customer getting a VAT invoice from us, that is easy and automatic as required by HMRC. The only "rule" we have is that Home::1 tariff is for non VAT registered customers. Such customers are not entitled to a VAT invoice, so there is no problem.

      Delete
    2. Yes, but if you tag on, say, a VOIP line to that, which doesn't fit the "No VAT receipt" rule, I get a singe invoice with both the DSL line (VAT included in price) and a call log with itemised prices which is all vat exclusive and a vat inclusive figure on the front page - so the figures don't actually add up.

      Makes it beyond frustrating to explain to an outsource offshore expenses team if I need to expense a phone call.

      Delete
    3. Perhap he is referring to amazon marketplace sellers https://www.amazon.co.uk/gp/help/customer/display.html?nodeId=201895810 mentions contacting the seller for a vat invoice in some cases

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    4. We have fixed the VoIP not showing VAT inclusive itemise prices now, should be OK on next bill.

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  2. We've seen all sorts of weird VAT treatments on bills from both Amazon and Google.... Google AdWords invoices are particularly opaque. Maybe when you get to that size you can just make the rules up as you go along?

    Many years ago I wrote a billing application for a company renting out photocopiers. We were asked to change the way VAT was charged on the invoice amounts for two different customers, which turned out to be different branches of the same national chain. So two accountants in different offices of the same legal entity wanted to see VAT accounted for on their suppler invoices in two (quite different) ways.....

    ReplyDelete

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