Are you JUST starting out on your Amazon Seller journey?
If you are JUST starting out on your Amazon e-commerce journey, NOW more than ever before, you need to give SPECIAL thought to your business set up - and doing so could make a MASSIVE difference to your PROFIT! In the past, selling a few things as an individual to test the water and see if you enjoy the ups and downs of being an Amazon seller and then drifting into being a Sole Trader registered with HMRC with an UTR number used to be the way forward for most of us who wanted an opportunity to grow our Amazon business and avoid jail for unpaid taxes! HOWEVER, the game has changed recently and as far as ungating is concerned, there are REAL benefits to becoming a Limited Company, rather than a Sole Trader. Sole Traders, and especially new Sole Traders, are facing an Amazon wall called the 'Business Licence' when trying to get ungated. Only a few weeks ago, a letter from HMRC confirming your UTR number and when you registered as a sole trader was enough to help you scale the wall, but NO MORE!
A 'Business Licence' is actually officially a US document and not available in the UK but Amazon now claim that because being a sole trader links in with your personal taxes, they won't consider you officially a 'business', and therefore an UTR document no longer suffices as a Business Licence.
You by-pass these issues as a Limited Company because then your business taxes are totally separate to your personal taxes and there can be no argument that you are officially a 'business'. Being a Limited Company also means any liability stays within your business which is helpful too. However, there are other tax implications to being a Limited Company and your accountants fees are more expensive so you should absolutely take professional advice on the best structure for you, however, PURELY from an ungating point of view, a Limited Company structure affords you many benefits and is definitely worth giving proper consideration to if you're serious about your Amazon future.