Amazon FBA from Ireland

atahuapla

Hi all,

I recently started selling on Amazon.co.uk (January) and the product has sold pretty well thus far turning over about £500-£600 per month with minimal effort.

Unfortunately my strength in marketing is let down by my business acumen and I'm struggling with the corporate admin side of things.

Wondering if there are any FBAers here that can advise on set up?

Here's my situation:

- Not set up as a Ltd company or registered a business name (sole trader or otherwise).
- Registered for a UK VAT number and have filed 2 returns so far with HMRC online. (Basically paying 20% of sale price per unit).

I'm conscious that I'll need to provide an Income Tax return at the end of the year in Ireland which will take another 50% of my gross so I'm thinking there are surely better ways to set up so I can reduce my liability.

Any advice appreciated, whether someone is in a similar boat or you can point me in the direction of a company that can help with this sort of thing. I went to a few Irish accountants who I felt were just not familiar enough with the tax intricacies of distance selling.

silver2020

£500 per month?
Less vat - £420 (vat is not 20% of the sale price - the sale price includes vat. UK Vat = 16.66% of the sale price)
Gross profit after amazon fees, shipping and cost of product? Maybe £100 - probably a lot less?

Then needing to file returns and build it into your annual tax return.?

It's not that accountants don't know/understand, its that the work involved will cost more than what you are making.


There are far easier ways to make a few bob. It you look at the time value of what you are getting, it's probably pittance.

atahuapla

silver2020 wrote: »

£500 per month?
Less vat - £420 (vat is not 20% of the sale price - the sale price includes vat. UK Vat = 16.66% of the sale price)
Gross profit after amazon fees, shipping and cost of product? Maybe £100 - probably a lot less?

Then needing to file returns and build it into your annual tax return.?

It's not that accountants don't know/understand, its that the work involved will cost more than what you are making.


There are far easier ways to make a few bob. It you look at the time value of what you are getting, it's probably pittance.

So it's not worth the hassle, do something else? Great advice. Sound. :rolleyes:

tacofries

Hi, only my opinion below so thread with caution and get expert advice.

What exactly are you looking for- an accountant to make vat returns to the HMRC on your behalf as well as prepare your annual accounts or more a personal tax advisor that can tell you how to limit your income tax liability?

Most accountants should be able to do the first option but before dealing with them find out if they have many clients trading in the UK. If they don't then walk away.

I take it you have another income stream in addition to Amazon if you're being taxed at 50%? If so, one possible option to help your amazon tax liability may be to set up as a limited company. You will have to pay corporation tax at 12.5% but you shouldn't have to pay income tax so long as you keep profits within the company and aren't taking a wage or dividend. It can be good if you plan on investing in other businesses as you'll have more money to invest and buy a bigger slice of the pie with which you will hopefully make a return on. Look up personal holding companies if you feel you'll have a few successful businesses/investments on the go.

Accountants can be pretty pricey and will definitely cost €600 ex vat per year if not quite a bit more even if you aren't selling a whole lot so you might not want to become a company, or register for vat, unless you are confident that you can grow revenues quite a bit.

silver2020

atahuapla wrote: »

So it's not worth the hassle, do something else? Great advice. Sound. :rolleyes:

On the figures you have provided, yes, not worth the hassle. Simply not profitable unless you can grow it multiple fold.

Too many people who start selling online do not take into account all costs and the value of their time. If you spend more than 2 or 3 hours a month on the project, you are unprofitable and that's assuming a gross margin of 50% before any costs.

AnthonyOD1987

Hello, wondering how you got on with this in the end? Doing similar research and struggling to find accountants that deal with vat filings in Europe in addition to Ireland and Uk

atahuapla

AnthonyOD1987 wrote: »

Hello, wondering how you got on with this in the end? Doing similar research and struggling to find accountants that deal with vat filings in Europe in addition to Ireland and Uk

Hey Anthony,

I'm still selling, haven't registered a company in Ireland. I just applied and got a UK VAT number and paid them 20% (VAT) of my RRP every 3 months. As of Jan 1, amazon now collects VAT at point of purchase so no need to bother with that any more.

As for income tax, it's pretty straight forward for folks who have additional income under €5k on top of their PAYE. You just declare your profits it on Revenue.ie. I did it recently for 2020 profit and got a return saying the amount owned would be deducted from tax credits throughout 2021.