Where should I put ebay fees in my accounts?

WOODWOOD

Hi all.

I'm self employed and have recently been selling a few items on ebay, I was just wondering what category I should put ebay and paypal fees under. Doesn't seem to fit in anywhere.

Thanks for your help.
Woody.

ragz_2

Do you mean into your tax return or into your books?

ragz_2

If you mean your tax return I would say "box 16 - Interest and bank and credit card etc Financial charges"
If you mean your books then I'd just write it under expenses, but then my books are simple simple - just one column for all expenses.

HTH

Rolo_Tomasi

Personally, I treat them as a direct cost and would include them in cost of sales.

The most important thing is to remember where you include them this year so that you can be consistent in future years.

Pennywise

Paypal fee would be bank charges, but ebay fees are presumably listing and final value fees so aren't bank charges at all. Ebay fees are either advertising or cost of sales, as said above, whatever you call it, be consistent from year to year.

WOODWOOD

Thanks for the replies.
It was where to put them in my books and on the tax return, was just unsure of the category really.

Paypal in bank charges makes sense as it's a charge for the transaction, and
ebay listing and final value in the cost of sales sounds good too.

Just wanted to get it right at the start as I'd hat eto have to go back and change it!

Thanks again all.

Shoog

Was just about to post a similar question but found this thread...

I'm still not sure about where to put eBay fees. What is meant by "cost of sale"?

Does this mean to just subtract it from from your total sales and put that figure in box 8 ("Your turnover")?

Or, should it be added to box 10 ("Costs of goods bought for re-sale or goods used")?

Or, box 18 ("Other allowable business expenses")?

Thanks for any help.

blue_monkey_2

Your cost of sale is the cost associated with that sale of that item.

I, however, analyse the costs seperately as I turnover more than the 15K. Once you reach 15k you have to analyse all of your expenses seperately on the self assessment return.

Turnover is the total of your sales including all postage costs.

Box 10 is the cost of the goods you have sold to aquire your turnover.

EBay and Paypal fees I include in Financial Expenses.

Say you have bought £1000 worth of goods and sold £500 worth for £1500 plus £500 postage fees, your turnover is £2000, your cost of sale is £500. Other allowable expenses are those not already mentioned on the form. You cannot claim the full £1000 of goods as a cost of sale because you have not sold all of the items. This is why it is important to keep records. I have a spreadsheet where I list everything I sell with the date, reference number, the sale price, postage and then the cost price so I can calculate my profit as I go.

NiceGuyEddie_2

Ebay fees are not financial expenses - they are not related to the raising or use of finance.

Cost of sales would be the most appropriate place for them.

blue_monkey_2

NiceGuyEddie wrote: »

Ebay fees are not financial expenses - they are not related to the raising or use of finance.

Cost of sales would be the most appropriate place for them.

And the items you pay for listing that you have not sold?

I used to have around £2000 a month in fees, £700 of these were for goods that did not actually sell so it is NOT cost of sale. A shop fee is not a cost of sale.

Cost of sale is a cost relating to a sold item.

Paypal fees ARE Financial Charges because these fees are the same as what I am charged for having a Merchant Account. Rather than being billed monthly as a Merchant Account Provider usually does Paypal takes a fee per transaction. This is the kind of thing that the box for Financial Expenses is for.

I believe I had my eBay fees in 'Other' as mine were split into eBay/Paypal and not lumped together as I have always used Sage Accounting for my books, but you can have it in Financial too, as long as you are keeping good records then if you ever get a visit you can show the taxman what has gone into the box.

You should of course be analysing Ebay and Paypal charges as seperate transactions because one IS financial the other, you could argue, is advertising costs as you need to advertise them on eBay to be able to sell them - eBay then take a fee for you selling that one particular item. Your cost of sale of things on eBay = (cost + postage + eBay fee for that item).

You cannot however claim ALL of your eBay fees as a 'cost of sale' because you might not have sold everything you listed. Cost of sale is the cost of selling the items you have listed in your Turnover box.

I've not sold on eBay for a long time now, the money I used to pay eBay means I can be more competetive and I do not do as much work but earn more money.

NiceGuyEddie_2

I'm an accountant I have multiple clients who trade on Ebay, and our firm would not consider Ebay fees to be financial expenses.

I didn't dispute that Paypal fees are not financial charges, as that is def. the most appropriate place for them.

However for small traders, it's really not a big issue