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FBA - what is required from a tax point of view and what is the impact of brexit

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  • 08-01-2021 6:18pm
    #1
    witnessmenow
    Registered Users Posts: 7,152 ✭✭✭


    Hello,

    I have a product I designed and get manufactured in China which is an accessory for 3D printing, which is a relatively popular category on Amazon, and I would like to get the item on FBA to see how they would sell.

    I currently sell it myself on an online market place called Tindie (it's basically Etsy for electronics) and I also wholesale to a 3d printing shop in the US. I only properly started selling them 2020 myself (was selling it in kit form up to this) and have been selling around 100 units a month or so, with the UK being a big percentage of these. The shop in the US sells roughly 1000 a year at a guess, although it picked up a lot in 2020, so there is a somewhat proven market for the item.

    It is a low value enough item, I sell it for $7.25 + shipping, but I would potentially either charge more for it on Amazon or sell it as a two pack to increase the price to cover Amazon fees, Maybe charge 8GBP for one or maybe 12GBP for 2 or something.

    I would probably start with the FBA small and light service as the items should be suitable for that and the fees seems a lot less (although it wasn't clear to me if I needed to sell them through the regular FBA first to have the minimum sales required). I am happy enough for the first experience of this to not make money, as I find out how this works, maybe start with 100 units or so.

    I am not currently VAT registered as my total sales to the EU are not there yet (quite far off). In other tax news, I'm a full time PAYE already on the higher rate of Tax. I am already declaring additional earnings with revenue.

    What is the Tax situation with doing FBA at the moment? Is VAT payable on the goods as they land with Amazon? Do I need to register with the UK VAT system to be able to send the items? Does Amazon charging VAT as they fulfil the order satisfy my obligation to charge VAT?

    Apologies for all the questions, I'm not sure where to look this up!


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