Not upheld: VAT treatment and fund withholding complaint against Amazon Payments UK Limited

Decision detail

Summary

H, a seller on Amazon, complained that APUK first classified it as VAT exempt, then applied VAT to its sales and failed to disburse full amounts due. H's director claimed APUK's mistake in granting VAT exemption caused the problem and sought £100,000 compensation. The ombudsman found that APUK and AEU are legally separate entities, and the decision to apply VAT to H's sales was made by AEU, not APUK. Since the ombudsman lacks jurisdiction over AEU's VAT decisions, APUK cannot be held responsible for AEU's actions. The complaint was not upheld.

The Ombudsman's reasoning

Although APUK and AEU are closely connected, they are legally separate entities. The ombudsman has no legal power to consider AEU's VAT decisions or inventory treatment. The alleged losses stem from AEU's decision to apply VAT to H's sales, not from APUK's VAT treatment of Seller fees. APUK's withholding of funds was justified under the contractual terms and was based on information received from AEU. APUK cannot be held responsible for AEU's actions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website