Compliance check in the United Kingdom

What is a compliance check?

A compliance check is a company audit by the British tax authority (HMRC). During the audit, the authority requires various information from you, such as Amazon VAT transaction reports. A list of the most commonly requested data/documents can be found further below. The documents are usually requested step by step. However, the deadlines are often very tight and delayed submission comes with a high risk.

What risks does a compliance check involve?

If documents requested by HMRC can't be submitted in time, your British Amazon and eBay accounts can be quickly blocked. The account blocks can be removed before the end of the compliance check, but in practice this takes a lot of time. A consequence of a block can be exclusion from the Amazon PAN-EU programme.

How long does a compliance check take?

A compliance check typically lasts several months. We're unable to say how long exactly, since every compliance check is different. The duration of a compliance check varies significantly depending on the audit areas of the tax authority and the volume of the requested data.

Can Taxdoo oversee my compliance check for me?

We'll be glad to handle overseeing your compliance check together with our partners on location. Oversight includes all communication with the British tax authority. We'll promptly notify you which information is needed and where it can be found. Of course, we are also always available to answer any of your questions that arise during the compliance check.

A compliance check involves a lot of work for us and our partners. For this reason, we charge a lump sum of EUR 1,500 for this service.

We can also oversee your compliance check if your British power of attorney has not yet been issued to our partners. To this end, you simply need to sign a special power of attorney which we'll send you after you order this service.

Which documents do I need to provide to HMRC and where can I obtain them?

This differs from case to case. In our experience, HMRC asks for information piece by piece. Each information request is usually subject to a very tight deadline. To minimise the risk of submitting information late (e.g. due to a delayed response from partners like Amazon), we have prepared a list of the most commonly requested documents. In order to comply with any deadlines, we kindly ask that you provide us with the listed documents as quickly as possible. We'll then submit them promptly to HMRC upon request.

However, after submitting the information and documents, HMRC may make further demands, which can vary depending on the individual case (e.g. evidence of movements).

Here's an overview of the documents and information typically requested in our experience:

• All existing registration confirmations.
• The VAT-21 form, if we have not registered you in the United Kingdom.  
• The data which your previous provider used to prepare and submit the returns for you abroad. Our transaction lists are intended for the period handled by us.
• VAT transaction reports for the entire trading period until the last completed month. Please send us the report in the original format.
  • To access these, please take the following steps in Amazon Seller Central:  "Reports" > "Fulfilment by Amazon reports" > "Tax" > "Amazon VAT transactions report"

• Amazon custom summary reports for each Amazon marketplace on which you are active and retroactively if possible.
  • You can find the requested reports in the Amazon Seller Central as follows: Reports → Payments → Data range reports → Generate reports → Select summary report

• Amazon fulfilment report, referred to as "Shipping queue" in Amazon Seller Central.
  • Please request these reports directly from Amazon, for your entire trading period.

• PayPal and eBay reports, if applicable.
  • Please also request these reports directly from the respective provider.

My compliance check has finished and I am not sure if the result is right.

We'll be glad to examine the result of your compliance check with our partners if we have also overseen it. Our partners will check any opportunity to reduce an existing tax burden and contact HMRC in this regard.

If we did not oversee your compliance check, we're unfortunately unable to check whether the result is correct. The work involved in this case would not be covered by the costs incurred and we would not be able to guarantee that we could examine the entire compliance check in time.