Amazon’s VAT lottery leaves buyers out of pocket

Amazon’s failure to disclose whether third-party Marketplace resellers are VAT registered is costing business buyers hundreds of pounds, a PC Pro investigation has discovered.

Although Amazon itself states VAT-inclusive prices for its own goods, products sold via Marketplace resellers can be listed either with or without the tax added depending on the company’s VAT status, making it a lottery to know what the final price of goods will be.

For SMEs trying to find the best price possible, the cost can be significant, potentially meaning they can’t claim back the 20% VAT as a business expense.

The situation was highlighted by a PC Pro freelancer, who was buying equipment for his company Creativemark, and found that some resellers weren’t supplying the VAT receipts that would enable him to claim back almost £400 on a high-end laptop.

With very little to make it obvious whether a reseller on the site is a big business or a small scale non-VAT registered trader, it is impossible to know which trader is offering the best final price.

As the page above shows, the prices listed don’t state whether the trader is VAT registered, and if the trader isn’t registered they can’t send a VAT receipt. In the example above, some of the MacBooks are sold via Amazon, some are sold by resellers but fulfilled by Amazon, while others are fulfilled by the resellers themselves.

“Amazon told me that some marketplace resellers are not VAT registered, thus can’t send a VAT invoice,” Wiles said.

“None of these prices tell you if they include VAT or not. It’s complete pot luck! You could end up buying one of these laptop’s for £1,995, as an example, without VAT, whereas you could have spent £60 more and bought from Amazon UK, which would include 20% VAT. So, buying the cheaper one would actually cost you far more as you couldn’t claim back the VAT.”

We’ve asked Amazon to comment on the situation, but the company has so far declined to respond.

When the PC Pro freelancer complained about not receiving a VAT receipt, the company referred him back to the reseller – saying the problem rested with the vendor.

“Since Amazon.co.uk isn’t directly involved in the sale of merchandise between buyers and third-party sellers, we are unable to supply a VAT invoice for this order,” the retailer said in correspondence on the matter.

“However, I have forwarded your request to the seller to ask that they issue a VAT invoice to you. If the seller isn’t VAT registered, we’ve asked them to contact you to confirm their status.”

Missing receipts

According to Inland Revenue officials, the department feels Amazon does a relatively good job of explaining where tax is included on the site, but Wiles has often found that goods bought through the company arrive without a VAT receipt, which leaves him out of pocket.

The situation means non-VAT registered companies can make their items look more attractive by keeping prices below larger competitors, but not usually by the 20% they save in not having to apply VAT.

“This is the third time I’ve had to go to Amazon to ask it to nudge a marketplace reseller to send an invoice (often they do not send one automatically),” our freelancer said.

According to Inland Revenue officials, if a reseller doesn’t charge VAT, it’s obvious that the VAT can’t be claimed back. “If a seller is not VAT-registered, they wouldn’t charge VAT, so there is none to reclaim from them,” a spokesperson said.

But unless Amazon makes it clearer whether companies are VAT-registered or not, buyers will be none the wiser.