Do I Have To Register My "Business" If I Am Amazon Driver
Last updated: thirty May 2022
Choosing to sell on Amazon is becoming increasingly pop for individuals, sole traders, and limited companies, providing enhanced exposure and admission to millions of potential customers online.
According to Mintel, almost xc% of all UK shoppers use Amazon, and effectually seventy% brand purchases on the site at least once a calendar month. As a outcome, Amazon is at present the fifth largest retailer in the United kingdom of great britain and northern ireland. It'southward easy to see why it'due south such an appealing selling platform for new and existing businesses of all sizes.
At Rapid Formations, nosotros receive a lot of enquiries from people who are interested in setting upward a limited company for an Amazon concern. The two almost common queries are:
- Is it better to sell on Amazon equally a limited visitor or as a sole trader?
- Can I change my Amazon Seller account from sole trader to limited company?
To answer these questions and help you to make the right decision, nosotros will talk over the sole trader and limited company options bachelor in the UK, also as the process of setting upwardly an Amazon Seller account. By the end of the web log, yous should have a ameliorate understanding of this confusing topic and exist confident in your conclusion to sell on Amazon equally a limited visitor or sole trader.
Should I sell on Amazon as a sole trader or limited company?
Deciding whether to employ a sole trader or express company business construction depends on how much y'all're going to sell on Amazon. Choosing the wrong type of business organization structure could significantly impact your Income Tax bill and National Insurance contributions (NIC), and so it is not a decision that should be taken without careful consideration.
Generally, if you lot're only likely to sell a minor number of items each month, or you are planning to sell on Amazon on a coincidental ground, registering equally a sole trader will probably be best. In these situations, you're unlikely to proceeds whatever tax advantages by setting upwardly a company. Notwithstanding, if you're intending to sell a lot of products on Amazon on a regular footing, it will exist more tax-efficient to set upwards a limited visitor. Yous will also benefit from express liability.
Potential revenue enhancement savings
Limited companies pay 19% Corporation Tax on profits. Sole traders pay 20-45% Income Tax on profits. Value Added Tax (VAT) may too be payable. However, the rules and requirements for VAT registration are the same for companies and sole traders, so this potential tax liability will employ either style and should non influence your choice of business structure.
Choosing to sell on Amazon as a limited company will enable y'all to minimise your personal revenue enhancement and NIC liabilities. This is because yous volition exist able to pay yourself a combination of salary and dividend payments.
By paying yourself a salary beneath the National Insurance main threshold, yous won't accept whatever National Insurance or Income Tax to pay. The primary threshold for the 2022-23 tax year is £9,880/yr (6 April—v July 2022), then £12,570/year (6 July 2022 —5 April 2023).
Meanwhile, the beginning £two,000 of dividends will be taxation free. Any dividend income to a higher place that amount will exist field of study to dividend taxation rates between 8.75% and 39.35%, which are far lower than Income Revenue enhancement rates. Furthermore, neither you nor your company will have to pay NIC on dividend income.
Conversely, if you cull to sell on Amazon as a sole trader, all profits will exist treated as personal income. This means that all of your profit will exist bailiwick to varying rates of Income Taxation and NIC.
As a general rule of thumb, yous will pay more tax equally a sole trader than a express company when your annual income from all sources reaches around £thirty,000 per year. And if your income exceeds £l,000, you'll become a Higher-rate taxpayer, which means y'all will pay twoscore% tax on any personal income above that corporeality.
Express liability
Bated from the revenue enhancement-saving benefits, setting upwards a express company will as well protect your personal finances. This is because limited companies are treated as distinct legal entities (but like people), and so they are responsible for their own debts and liabilities.
If your business organisation faces any legal issues or is unable to pay its bills, your personal finances and assets volition be protected beyond what you've already invested in the business.
If you lot set up as a sole trader, there volition be no legal stardom between you and the business organization. All business organisation debts and liabilities volition be your debts and liabilities, so your personal finances and assets will be at risk if anything goes incorrect.
Is it difficult and expensive to set a company?
There are many misconceptions regarding setting up a limited company. People assume it is difficult, expensive, and requires a lot of piece of work. In reality, it's really quick and piece of cake to set up a company, it can cost every bit niggling equally £12.99, the annual reporting requirements are pretty straightforward, and using an accountant to deal with your taxation affairs will probably salvage yous money.
You can register a limited company for your Amazon business concern online. It takes effectually 5 minutes to make full out the application grade, and most companies are ready within 3 to 6 working hours. When your company is registered, you will receive all of your incorporation documents and you lot tin start trading immediately. Y'all tin and so set up upwardly your Amazon concern on the very same day.
The simplicity of company formation comes as a surprise to many people. It is no longer an exclusive business concern structure reserved only for affluent entrepreneurs and large businesses. Limited companies are suitable for all types of traders and all sizes of businesses, both new and established.
You lot volition have a few additional filing obligations and may have to spend a picayune more money on an accountant (which is optional, not required), but you will have the opportunity to retain more of your Amazon profits. Your auditor can advise on the best ways to minimise your tax bill and operate your business concern in the most tax-efficient way, so you lot will probably salvage more than money than you spend on whatever such boosted services.
Changing Amazon Account from sole trader to limited visitor
If you are already fix equally an Amazon Seller, changing from a sole trader to a limited company tin can exist tricky. It actually shouldn't be, only the process of moving an Amazon Seller Account to a new entity requires re-verification, which seems to result in significant delays.
In many cases, sole traders who request to transfer an existing seller account to a new express company are unable to sell through Amazon for several weeks or months whilst their accounts are waiting to be reverified. During that fourth dimension, seller accounts are often suspended, resulting in lost income.
Given the apparent difficulty that most people face when attempting this procedure, we would advise setting up a limited visitor before creating an Amazon Seller Account – specially if you know or think that you will want to trade every bit a limited visitor at some indicate in the future.
Setting up an Amazon business organisation
There are two means you lot can sell on Amazon – past registering every bit a vendor on Amazon Vendor Cardinal, or by registering as a seller on Amazon Seller Key. As an individual or a startup or small business organisation, you will only be able to create an account on Amazon Seller Central, but it'southward worth agreement the difference between the two types of accounts.
Amazon Vendor Central Business relationship
A popular option for established manufacturers and distributors, Amazon vendors human activity equally suppliers, selling their inventory (i.e. products) straight to Amazon at wholesale rates. Amazon then resells the products to customers under its ain brand name, taking care of everything from pricing and shipping to customer service and returns.
It is not possible to utilise to be an Amazon Vendor – registration is by invitation just, reserved for top sellers and well-known brands. Products being sold through Vendor Cardinal volition normally feature the phrase "ships from and sold past Amazon.com." Only you never know, one day you may receive an invitation!
Amazon Seller Key Account
Amazon Seller Central is suitable for individuals and any size of business. It is designed equally an online marketplace for brands and merchants to sell products nether their ain proper noun directly to Amazon customers. To sell on Amazon, you will need to choose a selling plan and fix an business relationship on Seller Central.
Amazon Selling Plans
Amazon Seller Central offers two selling plans – a Basic Selling Plan (to sell a fiddling) and a Professional Selling Plan (to sell a lot). Yous must choose the most suitable plan before creating an account.
Basic Selling Plan | Professional person Selling Plan |
| Ideal for individuals, casual or seasonal sellers, and very modest businesses | Ideal for businesses with high-book sales and/or those selling restricted products |
| Sell upwardly to 35 items per calendar month | Unlimited selling |
| 'Pay as you lot get' pricing – £0.75 (+VAT) fee per item sold | No per-particular fee |
| Boosted referral fee per centum calculated on the total sales toll | Referral fee percentage calculated on the total sales cost |
| No monthly subscription fee | Subscription fee of £25 (+VAT) per month |
| Sell products in certain categories only | Sell in all categories |
| Add items to Amazon Marketplace one at a time | Add large batches of products using bulk tools |
| Amazon-ready commitment rates for all products | Seller-gear up delivery rates for not-BMVD products (Books, Music, Video, and DVD) |
Which selling plan is right for you lot?
Your choice of selling programme volition depend on two things: the products that you're selling, and the number of items that you programme to sell each calendar month.
If you're selling products in a category requiring approval and/or you're planning to sell more than 35 items per month, you volition demand to choose the Professional Selling Programme.
Here is a unproblematic price-benefit analysis to help you lot determine which selling programme in best:
- The Basic Selling plan offers a pay-as-you-become rate of £0.75 (+VAT) per order
- Yous would need a minimum of 34 sales/calendar month to offset the £25.00 (+VAT) subscription fee for the Professional Selling Plan (34 x £0.75 = £25.l)
- If y'all have fewer than 34 sales per month, the Basic Selling Plan will probable be the best option for yous.
You tin can easily switch between Amazon's Bones and Professional selling plans at any time, downgrading if y'all're not selling plenty each month or decide to have a intermission, and upgrading if you need admission to additional features or it becomes cost-effective to utilize the Professional person Selling Plan at any point.
Please annotation: Amazon sometimes refers to the Basic Selling Program as the 'Individual' selling programme, so don't exist thrown if you come across this term when you're creating an account or reading manufactures on Amazon or other websites.
Create an Amazon Seller Account
In one case you get to grips with the terminology, requirements, and restrictions, creating an Amazon Seller Business relationship is (usually) quite straightforward. Substantially, in that location are three main steps:
1. Decide what yous want to sell on Amazon
You will showtime demand to choose the appropriate Amazon production category under which to listing your products. More than than 20 'open categories' are available to both Basic and Professional person sellers. Additional 'categories requiring approval' are available just to sellers with the Professional Selling Program. We hash out this in more item below.
2. Choose a selling plan
Basic Selling Programme or Professional Selling Programme?
3. Register and start listing
One time you've chosen your product category and selling plan, you are ready to create your Amazon Seller Account. You lot volition demand to provide the following information (where applicative):
- Location of business organization (or your country of residence if you don't accept a business)
- Blazon of business
- Sole proprietor (sole trader)
- Privately endemic business (limited company or partnership)
- Publicly-listed business (PLC)
- Country-owned business organization
- Charity
- Individual (a person, rather than a business)
- Legal concern name
- Your full proper noun
- Registered business concern address
- Business telephone number
- Company registration number
- Unique Taxpayer Reference (UTR) number
- Full name of the primary contact for the seller account
- Personal information for the master contact person
- State of citizenship
- Land of nascence
- Date of nascency
- ID (passport, UK driving licence, or National ID)
- Residential accost
- Telephone number
- Verify your telephone number past entering a former pin that is provided to you past text message or voice call
- Country whether master contact is a beneficial possessor of the business or a legal representative of the business
- Payment method (to pay your seller fees and to receive gain from sales)
- Store name for listing your products on Amazon Market place
Side by side, y'all will exist asked to enable 2-step verification to protect your account. Use your telephone number to receive a 'One Time Password' past text message or telephone phone call and enter it when prompted.
When yous have successfully completed the verification, y'all volition be taken to your Seller Central dashboard where you can manage your account details and provide any required documentation, such as proof of ID, business documents, and VAT details. Once Amazon has received and validated your information, you lot can outset listing your products.
Categories and products requiring approval on Amazon
To comply with all applicable laws and ensure that customers can store with confidence, approval is required to sell certain products on Amazon. Given that Amazon sells a vast range of products, the list is extensive. Hither is a brief overview of the types of listings that may need approval:
- Alcohol
- Adult-oriented products
- Clothing (east.g. branded items)
- Drugs and dietary supplements
- Electronics
- Food & beverage items
- Jewellery
- 'Made in Italian republic' products
- Music and DVDs
- Items in the Toys and Games category from November to the end of January
- Streaming Media Players
- Items in Amazon Handmade
Like-minded to Amazon's Adequate Usage Policy (AUP)
You are required to notify Amazon at the fourth dimension of like-minded to the Acceptable Usage Policy (AUP) if you are planning to sell items in one of the following categories:
- Alcohol
- Adult-oriented, erotic, and sexual health products
- Dietary supplements and nutritional products
- Knives
- Not-prescription drugs
- Prescription and non-prescription eyewear
Amazon Payments Europe will have to perform additional checks to verify this information, which may delay the procedure. To select the relevant AUP category, you must:
- Click the 'Settings' tab on the superlative correct of your Seller Central account, then click 'Account Info'.
- Click on 'View or Edit' next to the choice 'Amazon Payments Europe Acceptable Utilize Policy'. You volition notice this tab in the first grayness box that appears at the top of the page.
- Select the relevant category or categories. If you don't want to sell in any of these specific AUP categories, no farther action is required. Otherwise, follow the next stride.
- If you want to sell goods in 1 of the specific AUP categories, yous need to inform Amazon by selecting the relevant category in Seller Central.
What business documentation practise I need to provide to Amazon?
If y'all're creating an Amazon Seller Central account as a business (rather than as a private individual), you will be asked to provide certain documentation to verify your identity and the existence of your business (if applicable).
Private limited company
- Current appointments written report / Visitor Study dated within the terminal 90 day
- Utility bill, bank statement, or credit carte statement in the name of the business, dated within the past 90 days
- Manufactures of Association
- Memorandum of association or statement of capital
Partnership
- HMRC correspondence that contains the partnership's UTR number, name, and business address, and 1 of the following:
- Discover to complete a tax render
- Alphabetic character confirming the partnership'southward registration with HMRC
- Most recent revenue enhancement render of the partnership, which must include the UTR number and the name and business organisation accost of the partnership
- Utility bill or banking concern statement in the name of the business, dated within the past 90 days
- Partnership agreement
Sole trader
- Self Assessment welcome letter of the alphabet
- Class 2 National Insurance Contributions nib
- Certificate of registration for Value Added Tax (VAT)
- Correspondence from HMRC acknowledging UTR number
- Discover to complete Self Assessment Revenue enhancement Return
- Utility bill, bank statement, or credit carte du jour statement in the name of the sole trader or trading proper noun of the sole trader, dated within the past ninety days
Registered clemency
- Governing document
- Current appointments study
- Charity Commission study
- Confirmed list of all trustees – must brandish full name and date of nativity of each trustee
- Utility bill or banking company statement in the name of the charity and including the registered accost, dated inside the by 90 days
Individual (individual) sellers and primary contacts
- Full valid passport
- National Identity Carte
- Britain driver's licence
- Utility bill, bank statement, or credit card statement addressed to the individual and dated within the past 90 days
You lot will provide the required information and/or documentation in your Amazon Seller Central account. Get to 'Settings' then 'Account Info' and select the sections that are highlighted in ruby-red to see what you lot need to provide.
It usually takes Amazon between v–x working days to verify information, only it can take longer. You may exist able to sell on Amazon whilst your information is being verified, but this is subject area to certain criteria. In some cases, you may accept to expect until your information is verified earlier you are permitted to sell on Amazon.
Where tin can I get a copy of my 'business registration extract'?
A business registration extract is an official document that confirms the registered details of a business organisation. The certificate that you will need to provide for this purpose depends on your business concern structure.
If you decide to sell on Amazon as a UK-registered limited company or LLP, you tin provide a Visitor Study. To obtain this document, follow these simple steps:
- Sign into your Companies House account at https://account.companieshouse.gov.uk/signin
- Enter your visitor proper name or company registration number in the search box
- Select the 'View all' tab
- Select 'View visitor data snapshot' at the bottom of the page
- Your company study will download to your estimator device
If you determine to sell on Amazon as a sole trader or partnership, your UTR number may suffice as a business registration extract, but you might have to provide bear witness by uploading a copy of a letter from HMRC that contains your UTR.
Uploading more than one document at a time
At that place is a limit to the number of documents that you lot tin upload and submit for review. If you need to provide several documents, you may have to merge them into one certificate. You lot can practice this by scanning each certificate, merging the scanned images into a Microsoft Discussion document, and creating a PDF.
Providing VAT details to Amazon
Every bit per the laws governing European union member states, Amazon charges VAT on all orders delivered to customers inside these EU countries. Whether registered as a sole trader or a express visitor, your Amazon business organisation may be subject area to VAT registration in ane or more countries.
If your Amazon business is gear up in the UK, you will demand to annals for VAT in the UK if:
- Yous shop inventory in the UK, and
- You sell these goods to UK-based consumers, and
- Your almanac sales exceed the UK VAT threshold of £85,000
- If you sell goods to customers in other EU countries, you might besides have to annals for VAT separately in those European union countries
If your Amazon business organization is fix in a different Eu country, yous will need to register for VAT in the Britain if:
- You store your inventory in the Britain, or
- Yous sell to non-business consumers based in the UK, and
- Your annual sales exceed the UK distance selling VAT threshold of £lxx,000
If your Amazon business is set up outside the Eu, you volition demand to register for VAT in the UK if:
- Items that you store in the UK are sold to EU customers
- If you sell to consumers in other EU countries, yous might too have to register for VAT separately in those Eu countries
You lot can add together your VAT registration number(s) and upload your VAT certificate(s) for your Amazon business concern once you lot have created your seller account. We would strongly recommend using an accountant if you lot need to register your sole trader or limited company Amazon business for VAT because information technology is an incredibly complex issue.
Getting paid for your Amazon sales
When consumers buy goods from your Amazon concern, they pay via Amazon Pay rather than directly to y'all. Amazon deducts the applicable fees based on your selling programme and then transfers the remaining gain to the business organization bank account linked to your seller business relationship.
To get paid for your Amazon sales using Amazon Pay, you must:
- Set up your bank account in Amazon Seller Central
- Ensure that you accept a valid depository financial institution account or credit carte du jour number equally your charge method in Seller Key
- Sell your goods using Amazon Pay buttons
- Dispatch your sold appurtenances but to the addresses specified by the heir-apparent and communicated by Amazon Pay
- Capture payments for your orders to collect payments from your buyers
Amazon Pay will transfer sales gain to your nominated banking concern account fourteen days after the first business twenty-four hours (i.e. Mon-Friday) on which the respective purchases were made. If yous ready upward (or change) your depository financial institution business relationship at any fourth dimension, your payments will be suspended for three days as a security measure.
Do I Have To Register My "Business" If I Am Amazon Driver,
Source: https://www.rapidformations.co.uk/blog/how-to-sell-on-amazon-as-a-sole-trader-or-limited-company/
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