Awaishan

Hope you are all fine

Best Practices and Understanding for UK Amazon VAT Rules (Effective 1st August) and E-Commerce VAT Policy


Firstly, it's important to clarify that Amazon's new UK VAT rule effective from 1st August is different from the requirements for UK-established and non-UK-established businesses. These are distinct scenarios:


Amazon's New Rule (Effective 1st August):
Amazon has simplified the VAT process by starting to charge VAT on fees. VAT on these fees can only be claimed if you are VAT registered and submit the sales VAT to HMRC either quarterly or annually.


Best Practice for Calculating Your Profit:
Here’s a step-by-step example using an item with a sale price of £25:


1. Purchase Price: £10
2. Purchase VAT: £10 x 20% = £2
3. Amazon FBA Fees: £2.75
4. Amazon FBA Fees VAT: £2.75 x 20% = £0.55
5. Amazon Referral Fees: £3.83 (if the item is sold at £25)
6. Amazon Referral Fees VAT: £3.83 x 20% = £0.77


VAT Calculation:
Amazon Sales VAT: £25 x 16.66% = £4.17
Total VAT to Pay to HMRC: £4.17 (Sales VAT) - £2 (Purchase VAT) - £0.55 (FBA Fees VAT) - £0.77 (Referral Fees VAT) = £0.85


Net Profit Calculation:
Sale Price: £25
Total Purchase Cost: £10 + £2 (VAT) = £12
Total FBA Fees: £2.75 + £0.55 (VAT) = £3.30
Total Referral Fees: £3.83 + £0.77 (VAT) = £4.60
Sales VAT: £0.85


Net Profit:
£25 - £12 - £3.30 - £4.60 - £0.85 = £4.25


On PPC expense the VAT will take place as on FBA and Referral fees
PPC will be considered as an expense and result in a loss and low margins


As long as you are selling in profit you can't receive any VAT from HMRC.


Threshold for VAT Registration:
The £90,000 threshold is only applicable to British nationals. UK residents who are not nationals, as well as non-UK residents, must pay VAT from day one. There is no threshold for them.


By understanding and applying these best practices, you can effectively manage your VAT obligations and ensure accurate profit calculations.

Happy selling

1 year ago | [YT] | 3

Awaishan

Are you selling in US?

Kindly check the health pages of your account to update or validate your business address.
YOU DO NOT NEED TO WAIT TO RECEIVE THE FORMAL NOTIFICATION.

2 years ago | [YT] | 10

Awaishan

All Amazon Sellers,


Sellers on Amazon are now able to use Elevate Banking Solution when they create an account with both personal and commercial data.

A complimentary master debit card has been issued by the bank, and it has been successfully tested for use as a payment mechanism on Amazon and for other overseas purchases. Additionally, the account information was utilized for the Amazon account deposit method, which Amazon has approved as well.

Given that Pakistani local banks occasionally reject accounts created on Amazon, this is really beneficial. Additionally, freelancers now have an alternative method other than Payoneer to accept payments in US dollars from customers abroad.


Thank you

2 years ago (edited) | [YT] | 5

Awaishan

VAT Email from Amazon - All those who are selling in the UK as an overseas entity!


Creating a new account with UK resident data and granting brand registry admin authority to it might be the best course of action if you have been selling in the UK and have not got any correspondence from Amazon regarding VAT.

Based on the above, you will have a new account ready with all the brand access.

You may now take over by doing a me-too from the new account to your current listing. You'll be able to store your listing, rating, reviews, and other data this way.

This is the case if you think the total cost of VAT is excessive and you are unable to pay it.

Thank You

2 years ago | [YT] | 4

Awaishan

VAT RELATED ISSUES – AMAZON UK MARKET….


Please remember these scenario....

1. If you are overseas:
You will be required to pay VAT on day one if you are not now based in the UK and are currently abroad.

2.If you are a UK national / Resident:
VAT is only due when you cross the threshold; it is not due on Day 1 of the transaction.

3. If you are overseas and have a UK national as a director:
You won't have to pay VAT right away; instead, you won't have to pay it until you over the threshold if you are a foreign national and your firm has a director who has a 75% stake in the UK. (It won't assist if you are adding a director in response to a communication from Amazon.)

4. If you have been selling without VAT as an overseas entity:
Emails are being sent by Amazon to individuals who have been selected on an individual basis. To put it briefly, if you have been earning more than the threshold and want to keep selling on Amazon in the UK market, you must pay VAT.


More clarification:
Since it is exporting products at zero rated vat, a UK Limited firm with a UK Amazon account that sells to non-UK clients would still need to register for vat. The registration level of £85,000 Vat still includes a zero-rated supply.

Regarding the second point—UK establishment vs. UK 75% shareholder—please take note that, according to Amazon, if your business is based outside of the UK, you will need to demonstrate your UK establishment in order to receive VAT relief. However, if you establish a UK establishment by designating a UK director—rather than a shareholder—and then apply for VAT, HMRC will request a "VAT representative"—someone who will guarantee your VAT debt. This individual would only offer such a guarantee if he had PSC status (person with substantial control) as a majority shareholder. Thus, everything is a hybrid scenario.

Thirdly, a shareholder appointment cannot be retroactively made as your UK business has most likely previously verified the appointment of another individual with a majority stake as a PSC over time. Therefore, implementing such a modification might result in a compliance notice from HMRC or Companies House.



In summary:
Like the Amazon US market, which collects sales tax based on state and sends it back to the federal government, the Amazon UK market may serve as a market facilitator.
Although it hasn't been established yet, Amazon will in this scenario collect VAT based on the previously listed situations and send it to HMRC.


Thank you

2 years ago | [YT] | 6

Awaishan

Amazing Feature - Amazon Seller Wallet is LIVE!

This is going to be fantastic since you can now transfer your balance from your Amazon Wallet to your suppliers immediately, eliminating the need to visit your bank, etc.
In conclusion, payments in USD can now be sent to bank accounts in the US and Hong Kong.
Thank you

2 years ago | [YT] | 7

Awaishan

Now Anyone Can Register UAE Amazon Account
How to Open Bank Account in UAE without having N.O.C Letter

Requirements to open bank account:


• Emirates ID
• Passport (Visa Page) Copy
• Your Selfie/Picture


Install the Emirates liv app on your phone, download it, and create an account while supplying these papers.

• Emirates ID (Front/Back)
• Passport (Visa Page)
• Beautiful Selfie/Picture
• Phone
• Email and all done


You can use these credentials to register for a "Amazon Seller UAE Account" after the account is established in five days and the debit card is sent to your address in ten.


• Emirates ID
• Phone
• Email
• Bank Account (Emirates Liv)
• Bank Statement (Emirates Liv)
• Debit Card (Emirates Liv)



If you have an Emirates ID and a passport with a valid visa page, you can also do this even if you are not residing in the United Arab Emirates.

Thank you

2 years ago | [YT] | 5

Awaishan

KSA Amazon
Charge Method.


Now!Amazon KSA Accepting these cards.
•Alinma Bank Traveller Card (KSA)
•Al AlJaziraBank Card (KSA)
•Al Ahli Bank (KSA)




You can use their prepared cards (Amazon generally does not take Prepared cards in other countries, but accepts in KSA) and register an online bank account by entering your Saudi Credential Details and Akama. -Please also mention! Once your account and debit card have been validated, you should transfer funds to your account (between 40 and 100 Sar) and link it to your Amazon account. This way, when Amazon tries to verify your debit card by charging you 1-2 Sar, your card will already be verified.


In certain situations, Amazon can resolve the debit card issue while needing a credit card for the Amazon KSA account. You can also contact Amazon Support to resolve the debit card issue.

Every time you create an Amazon account, please utilize your local bank to validate it. After it has been verified, create a Payoneer account and change it in your Amazon KSA Selling Account to start receiving money.


Thank You

2 years ago | [YT] | 5

Awaishan

KSA Population E-Commerce Scope

After Algeria, the Kingdom of Saudi Arabia (KSA) is the largest Arab nation. The most populous city in the Kingdom of Saudi Arabia is Riyadh, which is followed by Jeddah and Makkah. The important population statistics for Saudi Arabia are listed here, based on Worldometers' most recent study.



• Population as a whole: 36,947,025 people
• 41st among the world's population-richest nations,
• Making up 0.46% of the global population, 
• With an annual population growth rate of 1.48% 
• An 84.8% urban population
• 30.6 years old on average



In addition to being the world's top oil exporter, Saudi Arabia has the greatest petroleum reserves and produces the most gasoline. As a result, its economy is the biggest in the Middle East and is rated 18th in the world. Thus, the general level of living is regarded as average. In addition, the government has created several initiatives aimed at lowering poverty.

Saudi Arabian culture and way of life are rooted in Islamic history. In general, people are family-oriented, religious, and traditionalist. Islamic laws are adhered to for direction in their personal, commercial, economic, and political life. Everyday life incorporates prayer times, and as Friday is a holy day, businesses are closed on that day. Gender norms are enforced in certain instances, and men predominate in society at large. Individuals of different religions from all over the world come to Saudi Arabia to work, but they have less freedom to practice their religion there. Sikhs, Christians, Hindus, and other groups represent immigrant communities.

People of numerous countries travel to Saudi Arabia to work. In Saudi Arabia, there are people of many nationalities residing. According to statistics, the majority of foreign residents are Syrians, followed by Indians, Pakistanis, and people from all of Africa and Asia combined. The following is the ratio.

• 90% Arabs and 10% Afro-Arabs


Users of E-Commerce: Saudi Arabia has demonstrated amazing potential in the field of E-Commerce, with an average annual growth rate of 12.6% in recent years. The Saudi e-commerce market is among the biggest in the MENA area, with 36.31 million users (or 90% of all internet users) and is projected to grow to 11.83 billion by 2023. Saudi Arabia is predicted to surpass the United Arab Emirates as the leading Middle Eastern e-commerce market at this rate. Eighty-eight percent of the population uses mobile internet, making up 99 percent of all internet users.

Young Saudi e-commerce users (under 30) make regular purchases; 29% do so at least once every two weeks. The majority of things bought online are trip tickets, games, and fashion items. Online purchases made outside of Saudi Arabia are also important, especially from websites headquartered in the United Arab Emirates. Websites with Gulf content accounted for about 65% of all online transactions. The most popular e-commerce sites in Saudi Arabia are AliExpress, Namshi (acquired by Emaar Malls), and Noon.com (located in the United Arab Emirates). Some well-known local websites include Souq.com (now Amazon.sa), Haraj.com.sa, Opensooq.com, and Jarir.com.


In view of the increasing number of e-transactions globally. Furthermore, the Saudi E-Commerce Council of the Ministry also aims to strengthen the reliability of e-commerce, boost its contributions to the national economy and stimulate and develop e-commerce activities in the country 2023, which aim to increase confidence in e-commerce transactions, protect consumers against fraud and to increase e-commerce activities in the Kingdom.


Saudi Arabia is quickly becoming the center of attention for e-commerce industry leaders due to its enormous development potential. The most popular website in the nation, Souq.com, is currently owned by the enormous international e-commerce company Amazon. Amazon just launched the worldwide platform's seller registration for amazon.sa.

By 2023, there will be over 9.7 million vendors using the Amazon platform. As of 2023, over 2.4 million vendors have their items listed on Amazon.com. Less than 10% of vendors made $100,000 or more in sales each year. In the second quarter of 2023, Amazon's global net sales from third-party retail vendors were $32.3 billion.

One of the cornerstones of Saudi Arabia's Vision 2030 is e-commerce, with the goal set by the government being to raise e-commerce's share in the retail sector to 80 percent by 2030. The population's level of wealth is an additional aspect that is taken into account. In terms of purchasing power, the nation was among the top 20 richest in the world.


The opportunity to sell on Amazon.sa (Souq.com) has increased in value due to the growing market of eager and tech-savvy customers.



• No major competitor in the market as amazon.sa owned the market leader souq.com
• Low competition among local seller
• Opportunity to sale in-house eCommerce brands
• Cross-border retail becomes easier
• Reach thousands of potential buyers
•No monthly setup fees
• Due to higher purchasing power of people, generates more spending
• Fastest growing eCommerce region


Thank You

2 years ago | [YT] | 5

Awaishan

My Wise Account Ban/Deactivated Permanently | Don't Make This Mistake



Wise has been recently deactivating a lot of accounts for different reasons, Here are the possible reasons and the recommended solutions:






Possible reason for account suspension:
1. A sequence of transactions for FX trading is not permitted by Wise.
2. Not keeping track of money coming in and leaving out (Not keeping a file of bills and contracts).
3. If you have good grounds to think that you are breaking any laws or rules that may be relevant.
4. if a court of competent jurisdiction, governmental body, public agency, or law enforcement agency requests or directs wise to do so.
5. A sequence of transactions for FX trading is not permitted by Wise.







What we recommend you should be doing to avoid this:
1. Make sure that only legitimate transactions are completed. For instance, after placing an order, you should keep the invoice and screenshots of the order confirmation data on hand in case someone asks to see them.
2. If you are rendering a service, be sure to record the information for each party on paper and send the invoice to the company or person to whom you rendered services.
3. Always carry a trail of your finances, including who you are paying and how you are receiving the money, so that knowledgeable people can question you at any moment.
4. Get PRC from the bank, always bring USD payments straight to Pakistani accounts, and maintain the legitimacy of your funds.
5. Wise should never be used for FX trading.
6. If you are based in Pakistan, always have Payoneer as a backup bank. If you are situated outside, Mercury, Brex, and Globalfy are all excellent choices.
7. Steer clear of any transactions from such an account that may be related to trading FX.



Thank you

2 years ago | [YT] | 9