Looking for some help with first self assessment for HMRC

[tablecloth]

Hi there

I am looking for some help with my first self assessment. I am a sole trader based in the UK with a UTR number registered with HMRC. I started trading on Amazon using solely the FBA service in 2017. I have no other income streams besides Amazon FBA.

So I have some long and winding questions but I believe the answer is pretty straight forward for people here. I know most of you will be unfamiliar with Amazon so I will try to break it down.

Question 1. In order to gauge income from sales and expenses, Amazon has a business report function where you can see these 2 figures for the tax year (April 6th 2017 to April 5th 2018). The expenses column covers selling, shipping and subscription fees for using the Amazon platform. I believe I can declare these as expenses to HMRC because each month Amazon emails VAT invoices with these figures and others seem to use them.

So what I have been doing to get figures for HMRC is totalling the income from Amazon sales minus Amazon expenses. Once I have that number, I subtract it from the cost of buying products purchased in that tax year. The number left is my actual "profit" and this is what HMRC is ultimately looking at? I know this isn't exactly a professional way but is it a pretty solid way to operate for a sole trader?

Question 2: Amazon is primarily for UK based sales but they also allow you to sell to customers in France, Germany, Italy and Spain. I use distance selling to these customers (stock stored in UK) and are well below the threshold to register in the respective countries.

What my real question is, do I also declare these other country sales to HMRC? I am guessing I do but what is confusing me is what happens if I actually do go over the threshold in say Italy? I would be declaring similar expenses to both HMRC for my Italian sales as well as the Italian equivalent. Is that normal? Just seems weird to me but I am a noobie I guess! Also on a smaller note, since other country sales are in Euros, do I use a currency converter to GBP before giving the details to HMRC? Obviously the conversion rate changes daily so I am puzzled on that aspect.

I know this was a long and winding path but if anyone can shed some light on this I would be grateful.

[experience4u]

Hi

I have quite some experience of Amazon FBA whilst dealing with tax affairs of clients.

Question 1. In order to gauge income from sales and expenses, Amazon has a business report function where you can see these 2 figures for the tax year (April 6th 2017 to April 5th 2018). The expenses column covers selling, shipping and subscription fees for using the Amazon platform. I believe I can declare these as expenses to HMRC because each month Amazon emails VAT invoices with these figures and others seem to use them.

So what I have been doing to get figures for HMRC is totalling the income from Amazon sales minus Amazon expenses. Once I have that number, I subtract it from the cost of buying products purchased in that tax year. The number left is my actual "profit" and this is what HMRC is ultimately looking at? I know this isn't exactly a professional way but is it a pretty solid way to operate for a sole trader?

You are right in what you have stated above.

Question 2: Amazon is primarily for UK based sales but they also allow you to sell to customers in France, Germany, Italy and Spain. I use distance selling to these customers (stock stored in UK) and are well below the threshold to register in the respective countries.

What my real question is, do I also declare these other country sales to HMRC? No. You declare your profit in the country you are based in.

I am guessing I do but what is confusing me is what happens if I actually do go over the threshold in say Italy? Once you cross the VAT treshold then you register for your VAT in Italy. VAT and Income Tax/Corporation Tax are dealt with differently.

As for conversion rate, Amazon transfers Euros into your account as GBP, you can calculate the rate by dividing the two, as that is the actual rate.

Finally even being an Accountant myself, FBA is something very technical and I would suggest you seek services of a qualified Accountant.

Hope this helps.