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Amazon to ebay Dropshippers tax help
 

Specific question for people who dropship items from amazon directly to ebay customers. What do you do once you hit the £82k limit of reveneue allowed before you have to register for VAT. As far as i see it once you hit that limit then it is no longer possible to continue using this method? are there any loopholes for this?

Thanks in advance for any help from anyone on this.

Re: Amazon to ebay Dropshippers tax help
 

majority of ebay sellers pay no vat is the problem. You could go on the flat rate, 7.5% on sales,1% discount in your first year so 6.5% but you can't reclaim any vat

Re: Amazon to ebay Dropshippers tax help
 

Why would you even worry?

If you're going to be successful enough to earn £82k then I would invest that money into actual stock.

Re: Amazon to ebay Dropshippers tax help
 

Won't be earning £82k, only 5-10% profit.. I would like to scale it when i hit that point as its a hassle free method, no need to hold stock, post or anything else, its quick easy money.

Re: Amazon to ebay Dropshippers tax help
 

I was gonna say lol, seems too good to be true.

The method will still be viable won't it because tax is taken after ONLY the profit is left. You can take business expenses such as internet etc out of the profit so that you don't pay as much

Re: Amazon to ebay Dropshippers tax help
 

I am puzzled, whilst I know this is an easy-ish method.....do you not get any sanctions from az or complaints from buyers re packaging and invoice that is included, doing this? I think the scale-up may cause you more issues than just tax,......not saying it cannot work, just interested in your reasoning...

Re: Amazon to ebay Dropshippers tax help
 

Yes tax is only taken on profit, but once your revenue hits the £82k mark, you HAVE to register for VAT, thats just how it works..

Re: Amazon to ebay Dropshippers tax help
 

No sanctions from amazon, invoice is not included if you mark each item as gift before checkout, returns are easily handled, the process is easy, you have to have good customer service and communication skills, other than that there are no issues with this, the only problem i see is vat registration at the moment.

Re: Amazon to ebay Dropshippers tax help
 

can anyone help me out on this one?

Re: Amazon to ebay Dropshippers tax help
 

You'll have to register for VAT

Why is it that you're avoiding registering for VAT, why look for a loop hole?

Re: Amazon to ebay Dropshippers tax help
 

Your not understanding me, i make 5-10% profit on each sale.
If i have to register for VAT, that means i pay 20% Vat on each sale, which means it is impossible to make any profit, i will start making a 10-15% loss on each sale.

If this is the case then i have to keep my annual revenue under £82k and therefore i cannot expect to make more than £8k profit per year as i cannot scale due to having to register for VAT if i do any more sales than this, do you understand where i am coming from now?

Re: Amazon to ebay Dropshippers tax help
 

we understand - amazon often routinely makes more money on an item than the seller does....which is why I was puzzled by your margins.....

you probably need a tax advisor, maybe one that specializes in overseas territories, as
registering yourself abroad could be a way round it.

going for more tax exempt goods catagories?

do you have a spouse or business partner? dividing your sales up, spreading on more than 1 account could help....

Re: Amazon to ebay Dropshippers tax help
 

I would seek professional tax advice. See if there are any viable options for you.

Alternatively stay under the vat threshold and forget about it.

Re: Amazon to ebay Dropshippers tax help
 

Professional tax advice is your best option here. VAT is nasty and HUGE, especially at this stage in the business.

Death and taxes :(

Re: Amazon to ebay Dropshippers tax help
 

Hey Za1ntc, I noticed your thread here and I am in the same position as you with Amazon - eBay drop-shipping. I will go over the UK VAT threshold this year and the 20% VAT will wipe out my 10% profit margin. Did you ever get any definite clarification or advice on whether there is a way around it or if that's even how it works?

I really appreciate any advice you or anyone can give me.

Re: Amazon to ebay Dropshippers tax help
 

Few options (couple have already been mentioned).

Simply stay under the threshold. Also may be worth concentrating efforts on higher profit, lower total value items. Not always possible but it can be easy to get drawn into fast sellers that really cost you more in the long run.

Research Flat Rate Schemes. If you are unable to reclaim VAT from purchases for whatever reason, then this is worth looking at. Depending on what you sell you pay a reduced rate on your total turnover.

Not going to go over by a huge amount? The VAT man will allow you to go over temporarily without registering if you foresee it being a short term increase (Christmas sales for example). Give HMRC a call and they will help, they are actually great to talk to.

Ultimately if your skirting around the threshold and want to make more money then start finding wholesalers for your items. There really is no easy way around VAT.

Re: Amazon to ebay Dropshippers tax help
 

Thread is a year old lads..