What are the different VAT schemes AZInsight supports?
What is VAT?
VAT is a tax, which is payable on the sales of goods or services. For example, if a product costs $100 and there is a 15% VAT, the consumer pays $115 to the merchant. The merchant keeps $100 and remits $15 to the government.
Other examples:
- selling new and used goods, including by hire purchase
- providing a service, for example, hairdressing or decorating
- charging an admission price to go into buildings
- a self-employed person providing supplies, for example, some salesmen and subcontractors
The tax(VAT), in all cases, is ultimately payable by the final consumer of the good or service. The standard rate of VAT is 20% for most goods and services, in the UK.
How to configure VAT on AZInsight?
If you’re in the UK, VAT is something that will affect you whether you’re registered or not, so it is really important that you let AZInsight know what your VAT status is, otherwise AZInsight will not be able to properly calculate your costs.
- If you’re a UK seller and you’re not registered for VAT then you need to select the Non-VAT Registered scheme. As a non-registered VAT seller, you still have to pay VAT on the cost of the product and you have to pay 20% VAT on top of the Amazon fees(if you’re a UK-based company). Learn more by clicking here.
- If you’re VAT registered then you’re probably using the Standard Rate which is the basic way of being VAT registered. This means that you can claim back the VAT on the cost of the product. This also means that Amazon will not charge you the 20% VAT on top of their fees, the downside is that you as a seller pay 20% VAT of your Sell Price.
- Flat Rate Scheme, in essence, you pay a flat rate of VAT on your sales (which is lower than the standard rate), but you aren’t able to claim back VAT on purchases. Some sellers are part of a Flat Rate Scheme. If you are in a scheme like this, you can still use AZInsight. However, we recommend reviewing the setup with your accountant to make sure that it satisfies all of the requirements for your particular scheme. To learn more about the Flat Rate Scheme, please click here.
We offer a basic understanding of what VAT is from a seller's point of view. If you need advice on your VAT status we recommend that you contact an accounting professional. To read more about the VAT you can click here.
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