VAT on postage???!!!

misterthrifty

I have just been caught out on bidding for a camera memory card. OK, I didn't read all of the ad so didn't see the small writing that said he would add VAT to the bill, though it's a big cheeky I think. But VAT on the postage as well, is that legal? Surely it's zero rated.

Mr T

WHA

It is correct to add standard rated VAT onto postage if the item being posted is standard rated. It is only the original purchase of postage stamps that is zero rated - when they are incorporated into a standard rated product, the postage cost becomes standard rated also. Your supplier will be paying over VAT on his entire income, so you pay him the VAT, and he pays the VAT over to the Govt.

Moneymaker

Even if the item is zero rated (e.g. a printed book), VAT will still be payable on the postage because it's classed as a service.

(Obviously VAT is not payable unless the seller is VAT registered. If in doubt, you can ask for his VAT registration number and check it on the Internet).

mpython

As WHA says, stamps are zero rated to buy, but when inlcuded as part of a service, that is VATable, they are VATable as well. Only time stamps on their own can be VATable is if they are sold as collectables, e.g. a Penny Black at £3k.

martindow

Moneymaker wrote: »

Even if the item is zero rated (e.g. a printed book), VAT will still be payable on the postage because it's classed as a service.

(Obviously VAT is not payable unless the seller is VAT registered. If in doubt, you can ask for his VAT registration number and check it on the Internet).

Is that right Moneymaker? I thought that the carriage charge was liable to VAT at the same rate as the item being posted, i.e. zero for items like books.

Enterprise_1701C

The postage is considered a separate service , and is a separate item on the invoice. Books may be zero rated, but the service of getting them to you is not.

WHA

Martin is right, I'm afraid, whether postage is VATable or not depends on whether the goods are VATable or not.


From HMRC note 700/24 - Postage and Delivery Charges:-

".... there is a single supply for which the VAT liability is based on the liability of the goods being delivered. For example, any element of the price attributed to the doorstep delivery of milk and newspapers will also be zero rated. On the other hand any element attributed to the delivery of standard rated mail order goods will be standard rated."

So in Moneymakers example, because the printed goods are zero rated, the postage will also be zero-rated.

LULUBELLE_2

misterthrifty wrote: »

I have just been caught out on bidding for a camera memory card. OK, I didn't read all of the ad so didn't see the small writing that said he would add VAT to the bill, though it's a big cheeky I think. But VAT on the postage as well, is that legal? Surely it's zero rated.

Mr T

Is he a major seller - do you think he really is VAT registered? I believe that some sellers on eBay hide the VAT added bit in the small print, but aren't really VAT registered at all, just trying to (illegally) make a bit more.

Ask him for a VAT receipt - tell him that you can reclaim it

motorguy

LULUBELLE wrote: »

Is he a major seller - do you think he really is VAT registered? I believe that some sellers on eBay hide the VAT added bit in the small print, but aren't really VAT registered at all, just trying to (illegally) make a bit more.

Ask him for a VAT receipt - tell him that you can reclaim it

Then check the VAT number corresponds to his company name and address..

Moglex

In any event, VAT rules are that for VAT registered entities selling to the public, advertised prices must be VAT inclusive.

So the VAT authorities may well be interested if a seller is quoting VAT exclusive prices and mentioning in the small print that VAT will be added later.

MarkyMarkD

Excluding VAT on ebay auctions is just fee avoidance AND a way of ensuring your items are listed unfairly highly in searches as their prices are artificially suppressed.