Quite simply, yes. It is subject to the standard rate of VAT of 20%.
Can I reclaim VAT on My Amazon Prime Subscription?
Since a Prime subscription is subject to VAT, the same criteria would apply that applies to any other business expense. A business that has a UK VAT registration would be able to reclaim this VAT if they are using the standard VAT scheme and not using the flat rate scheme (where VAT reclaims are limited to very specific circumstances). If you are self-employed and there is any personal use involved, then the VAT reclaim should be apportioned between business and personal and a partial reclaim made. For companies, you can only reclaim VAT on goods and services that were exclusively used for your business. You will also need a VAT invoice from Amazon. This begs the question as to where to find this, and it is not an easy thing to find. At the time of writing (and these things often change, just to keep you on your toes!), you would go to Your Account, and there will be a tile labelled “Business Prime”. Click on that and scroll to the bottom where you will find the “Frequently Asked Questions” and the first FAQ is “Where can I download the VAT invoice for Business Prime?” Click on that and there is a link to your Prime invoices. This assumes you have an Amazon business account. We would always recommend using a business account for your business as there are a number of advantages:
- It is easier to obtain VAT invoices for anything that you purchase
- Those invoices will be made out to your business and not you personally, which is a requirement when reclaiming any VAT
- Prices are displayed VAT inclusive and exclusive so that you can see the true cost of each product. Not all sellers are VAT registered, so it is possible that what appears to be a cheaper option is not necessarily so if you can reclaim VAT on an alternative purchase.
Where Can I Find VAT Invoices for My Other Purchases?
Click into your orders, and then search for the item you purchased, and you will see “invoice”, click that, and it will show a drop-down which enables a download of any invoices associated with that order.
Final Thoughts
Our recommendation would to always open an Amazon business account for your business, as this will enable VAT invoices to be obtained more easily and also ensure you can see the best prices on products. For VAT registered businesses eligible to reclaim VAT on Amazon Prime, you should always obtain a copy of your Amazon Prime VAT invoice and reclaim the VAT incurred on your business’ VAT return.
How Can We Help?
At Elver E-Commerce Accountants we specialise in assisting e-commerce businesses with the unique tax and accounting challenges that e-commerce businesses face, whether that is navigating the complexities of accounting for e-commerce sales, VAT, both domestically and internationally, to cash flow forecasting, management accounts, sourcing and assisting with loan applications and advisory services. To learn more about how we can help you, visit our Amazon Accountant page. If you would like to discuss how we can help, please call 01942 725419 or use the contact form to book a meeting.