In the UK we don’t have to be VAT registered unless our vat deductible incomes go over a set threshold (85K). Can I register for that though voluntarily so that I get a VAT number I can provide Amazon with in order for them not to charge me taxes on PPC, monthly subscription etc as these are taxes they should pay for me, not me having to pay them to pay for me, if that makes sense. Also, if I voluntarily register for VAT in the UK and I do not reach the threshold, do I need to pay HMRC any taxes?
Answer: If you register for VAT you can claim back vat on expenses – but your product sale price is now inclusive of VAT – so you have to collect and remit vat on every sale at 20%.
I’d suggest if you choose to register then assuming you’re UK based you can opt for the flat rate VAT scheme, this means you pay 7.5% of total sales cost (and get a 1% discount in your first year). You can’t claim back VAT paid out but you’ll save VAT on Amazon sales fees but not PPC costs as they come from Amazon UK. Simple maths to work out of 6.5% VAT on your product is more or less than the 20% on your fees you’ll save.