VAT on small publisher sales via Amazon and Voluntary VAT registration

[Samjay]

Hello Marie

As Amazon collects and pays over the VAT on ebooks, should small publishers who are below the VAT registration threshold register for VAT voluntarily, as they should be able to recover the input VAT on their purchases. Is this arrangement some kind of Agency? Where can I find the rules on it please?

Thank you.

[Marie Stein]

Hi Samjay
If the publishers register for VAT, they’d have to pay VAT on their UK sales as well as recovering VAT on their income. If they are selling to Amazon in the UK as principal, which I imagine is the normal practice, then they could charge VAT to Amazon who would recover it as input tax.

I assume that we’re talking about Amazon UK, as the rules may be different if publishers are selling to overseas Amazon companies.

I’m not aware of any specific guidance on the VAT liability of ebooks . The VAT treatment depends on the contractual nature of the transactions and I haven’t seen anything that suggests that Amazon acts as an agent in the sale of ebooks, but I don’t know for certain as I’m not advising them!

But I’m sure that you’re aware that the zero-rate only applies to the sale of printed books, as explained in HMRC’s VAT Notice 701/10 Zero-rating of books etc http://tinyurl.com/8sr4y. This means that VAT applies to ebooks in the same way as any other electronically supplied services, such as downloaded software, film, music etc.

In any case, even if the publisher isn’t registered for VAT, Amazon has to charge VAT on the sales of ebooks that it makes as principal and I suspect that applies to most if not all of their sales.

Hope this helps but let me know if you have any more specific queries.
Marie

[Author]

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