Hello All,

We received an email re Establishment for VAT purposes last December - it was deemed that our company was not UK established for VAT purposes and thus had to pay Amazon all of the VAT due since 1st January 2021. We have been registered for VAT with HMRC since this date and have made VAT returns consistently.

Amazon calculated the liability amount from January 2021 as £160,000 although the sum of all of our filed vat returns (as per our accountant) in the same period is approximately £120,000.

On reviewing the workings that Amazon provided, it is clear that they are misidentifying many of our goods as standard rated that are in fact zero rated.

We sell mostly in the grocery category and some of the products we sell have specific HMRC guidance that they are zero rated, yet Amazon still maintain that these are standard rated. We have appealed the rates on 3-4 occasions and it does not seem like they are even reading many of the emails we are writing, each time just asking me to provide our proposed rates and then once again ignoring these. For example, one main item that accounts for a large portion of this VAT is Jacobs Twiglets (clearly denoted as zero rated in HMRC manual VFOOD8160).

We have managed to reclaim the approx £120K that we had already paid (i.e the double payment) from HMRC but are really struggling to reclaim the other £40K that Amazon are incorrectly withholding.

Has anybody else had success with appealing VAT rates or contacted a service provider that can assist?

£40,000 is a huge sum of money that has been withheld for 9 months now and obviously significant impacts our cashflow.

On a further note - since Amazon now collect all of our VAT at source, I am not confident that this is being correctly calculated either and can see on individual orders that standard rates are being charged on items that should be zero rated. This is despite the fact that we have correct VAT rates input for each of our SKUs. I would assume that the amount being incorrectly withheld from us on a monthly basis is in the region of £500-1000.

Any suggestions at all would be greatly appreciated.