Amazon have been emailing what looks like hundreds, if not thousands, of sellers informing them that their Amazon Disbursements are at risk of deactivation due to indicators of unmet UK business establishment requirements. Amazon require proof that sellers are based in the UK for tax obligations.
Amazon are asking for multiple documents including passports etc, then resending emails asking for same documents or more documents. No one has any idea how long it will take, or why Amazon have reasons to believe UK established sellers based in the UK are established elsewhere. It’s worrying for many involved.
– Amazon Seller
Another discovered that their UK documents weren’t enough, even though they only sell on Amazon UK:
We immediately emailed Amazon with a copy of our VAT certificate. Almost immediately after this we received a message saying that they now need our EU business documents. Goodness knows why they need this, as we only deal on Amazon UK and have only ever dealt on Amazon UK
– Amazon seller
And for some, the situation is even more serious as they are being told that in addition to their Amazon disbursements being held, they also need to pay VAT for historical B2C sales dating back to 2021 if they can not prove that they are a UK business. Sellers that have paid VAT to HMRC are telling us that they are now petrified that they’ll be bankrupt, with one sole trader telling us that the bill would amount to over £100,000.
Those that aren’t VAT registered in the UK (because they turn over less than £85k per year) are also being told they are liable for VAT on historical sales.
In such a case, additionally, you will be required to pay the VAT amount to Amazon to account for the historical un-paid VAT on all B2C sales that fall under UK VAT on eCommerce legislation since 1 January 2021
– Amazon email
Contact has been made with Liz Barclay, who was made Small Business Commissioner in July 2021, and she is investigating why Amazon suddenly need additional documentation and trying to mitigate the impact of holds on Amazon disbursements with HMRC.
Thank you for your email. I am so sorry you have found yourself in this situation. I have set up a round table online discussion between some affected sellers and an official at the Department for Business and Trade on Tuesday at 16.00. No one, including my office and the department, has jurisdiction over Amazon to make them react to this particular issue in any particular way, but the department has asked the company to investigate and we have alerted HMRC to the problems sellers are experiencing. In the meantime, I am collating all the information sent to me by sellers and will pass that to the department (unless you ask me not to). I will report back on any steps we are able to take or changes we manage to achieve. All best wishes
– Liz Barclay
There is never a good time of year to have Amazon disbursements held, but this month is perhaps one of the worst for those who have VAT and personal tax returns to settle at the end of the month. Doubtless Amazon have been obliged to complete KYC (Know your customer) information and at this stage it’s unclear if UK sellers have been accidentally caught alongside overseas sellers, or if they simply have to better verify your identity. Either way it’s a disastrous situation and totally understandable that sellers are worried about both their cash flow and the potential of being erroneously charged VAT on historical sales.
We’ll update as soon as we have more information, in the mean time, keep an eye on this thread on the Amazon forums, where Amazon mod Sakura has confirmed that the Amazon Disbursements held notifications are genuine and that they will be investigating, although currently they’ve not responded again.