VAT for amazon seller Do I have to create an invoice for each sale?

Hallo, I have been selling on amazon and over lockdown reached the threshold for VAT. I have to file a MTD return for the period 1st Oct 2020 to 31st May 2021. I had not been using any software for my Tax returns and I don’t have any invoices for this time. Up until now my amazon account details and my bank statements have been all I’ve needed to do my self employed tax returns.
So… now I am on the Flat Rate Scheme. I thought I could enter all my sales, all the payments from my records from Amazon and come up with the total amount I need to pay VAT on for that period, but it seems I have to retrospectively create invoices for each sale and then try to figure out how to mark them all paid. Is this right?
Sorry I am just overwhelmed at how difficult this seems.

You can upload a Amazon statement to quickfile, so you don’t need to enter every single line.
To tag them as paid you you can create auto tagging rules but only for new entries. For entries before you created a rule you have to do manually. Have a look in the knowledge base for Auto tagging rules. It is a very helpful tool.
For entering the Amazon fees, if you don’t upload a statement you could enter a monthly figure, is it a lot you sell you may enter a weekly amount but keep in mind to keep a record about all this, just in case the taxman wants to have a look.
You could also use zapier
You just set it up once and it will transfer all your sales and Amazon fees to quickfile and mark them as paid or sent
Hope this helps

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Thank you very much for this help. It sounds good. I’m going to try!

Hallo again,
I am trying to set up Zapier to connect my amazon account and quickfile. I am unsure about what action I want Quickfile to take, or what is the best for it to take, when I get an amazon order. Either Create Bank Entry or Create Invoice. I don’t need it to do anything in connection with my bank, so do I just want to Create Invoice? And then how do I mark that the invoice is paid? Sorry for bothering you, it’s just no matter how much I read I am having difficulty understanding Quickfile!

Hi Martina, Sorry for the late reply.
There are different ways of doing things and it depends on what you want. If you want (almost) everything tagged automatically then you need to use zapier to create bank account entries in your Amazon merchant account within quickfile. If you have setup this zap then create 2 auto-rules in quickfile (Bank accounts screen>>Option>>Auto Rules). One for tagging the amazon fees to your Amazon supplier account, this will also create Purchase Invoices and mark them as paid automatically. The other Rule is for your sales invoices, which will tag them to a “Amazon Customer/Client” Account (you can give it a name what ever you want as long as you know it is the stuff you sell on Amazon, it will also create sales invoices and mark them as money received/paid. If you use this method you have to keep all the records from Amazon (just in case hmrc is asking for this; that said I would keep it anyway). When the money from Amazon reaches your bank account (if you don’t use the bank-feed feature enter this amount manually to you current bank account within quickfile, if you use the bank feed this will happen automatically) , just tag it as a Transfer between accounts and click on your amazon merchant account. Done. Your amazon merchant account should level now. If amazon handles the fees separately, I mean, if they take it from your bank account and don’t deducted from the sum before they transfer the sales money to your bank account, then enter also the fee-amount in your current bank account (or let the auto-feed do it).

If you want to have everything very detailed in quickfile (Every customer name and so on and what each customer bought/spent), then you you use zapier to create invoices and mark them as sent during the zap-setup. Create a second zap which creates the bank entries in your amazon merchant account (like before). With this method you can not use auto-tag-rules, you have to tag every bank entry to the sale invoice to which the payment belongs. You can create a auto-tag-rule for the amazon fees, which is very helpful. It is also worth to know that you can only set one VAT rate in one regular zap. If the item have all the same VAT rate then everything is fine. But if you sell items with different VAT rates then you can handle this in different ways. Create a multi-step zap in zapier for each VAT rate, or create one zap with, lets say, 19% (If you leave the field blank it will use the UK Standard VAT Rate). All invoices with different VAT rates you have to change the VAT in the created invoices manually. If amazon provides the VAT rate in their feed then choose that line and you only need one regular zap. If you use multi-steps zaps or you use more than 100 zaps in a month then you have to pay for zapier. Also, if you use zaps und you sell quite a bit on Amazon then you are very likely to reach the paid account sizes in quickfile.
Hope this helps

Hallo, I’ve just read this and I want to thank you for taking the time to get back to me with all this. I’ll get a chance to look at it again and try it out later.

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Hi, I’m getting to grips with this now. Can I just ask you do you know, when Amazon take the 20% fee off each sale I make, do I have to pay VAT on that fee?

Yes, Amazon does charge VAT on seller fees . For your referral fees and monthly professional account charges, there will be an amount of VAT paid, which corresponds to the percentage rate in your country. However, if you have provided Amazon with a VAT number (and they have verified it), you will not be charged VAT.
Check you Amazon account, you should get a monthly invoice for the fees which should state the VAT amount (if any)

Thankyou, sorry I didn’t reply earlier but I have just been getting all the information together. But thanks, you have been very helpful.

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