The examples in this article includes suggested accounts and tax mapping for UK registered business using software such as Xero or QuickBooks to file your MTD VAT return.
VAT and tax mapping can be complicated if you don't understand the different tax transactions from your ecommerce store and how to account for them. Some channels only have Marketplace Facilitator Tax transactions available in the data files, and others include UK VAT transactions in addition to Marketplace Facilitator Tax transactions.
This article is intended solely for the purposes of technical configuration of A2X, there is no guarantee or assurance provided that the detail in this tutorial is best suited to your specific business needs or that it directly suits your tax obligations.
A2X and UK VAT transactions
Below is an example of a payout from an ecommerce channel with accounts and tax mapping suggestions for UK VAT registered users. Notice the separated tax lines for UK VAT related transactions. This example does not include shipping income or other ecommerce expense examples. However the same mapping principles apply.
Scenario 1: Product sales shipped to GB, UK VAT collected
Info: These tax transactions need to be wrapped back into the applicable income accounts so that the accounting system sees the full gross sales amounts and then accounts for the VAT by way of tax rates, accurately.
Scenario 2: Zero rated product sales shipped to GB
Info: These are UK sales for zero products. No VAT transactions detected
Scenario 3: Product sales shipped to DE, with Marketplace Facilitator Tax
Info: These sales have been tagged with MFV (marketplace facilitator VAT). This is where Amazon has collected and remitted some EU VAT on your behalf so they will be sold to the EU.
These are the net sales so we will apply a zero-rated VAT rate here for the sales, a liability account and No VAT for the marketplace tax transactions lines to exclude the transactions from your UK VAT return.
Based on the example account and tax mapping, the Xero invoice and VAT return examples are included below for reference.
Example Amazon Invoice in Xero including VAT
Example VAT return in Xero
This article is intended solely for technical configuration of A2X, there is no guarantee or assurance provided that the detail in this tutorial is best suited to your specific business needs or that it directly suits your tax obligations.
Amazon Transaction Type Categories
Shopify Transaction Type Categories
Amazon and VAT OSS
Shopify and VAT OSS
A2X VAT Settings by Marketplace
Do you need help with your A2X set up?
Are you struggling with setting up your Accounts and Taxes page and you would like some help from an accountant or bookkeeper? We have a directory full of expert accounting/bookkeeping partners around the world who are ready to assist with your e-commerce accounting and A2X.
Please click HERE to find an expert
If you have further questions or need assistance, feel free to reach out to us at email@example.com. We would be glad to help you.