Ebay bank transfers - Vat Dates and thresholds Advice

homi

Can anyone provide me some advice on the following .


I am a non VAT registered soletrader selling used items  on Ebay   . 

 Ebay has a new payment system where it bypasses paypal and pays the moneys direct into my  bank account  on a selected date . I have set this up so payment is made as a lump sum monthly to cut down on the bank charges and make it easier to handle refunds . 

My question is concerning the 12 month rolling Vat Threshold  which I am trying to keep under - is the actual payment date  when the item is paid for  ( and held by ebay )   or at the end of the month when it is  transferred into my bank account ?

Thrugelmir

When you decide to withdraw the funds is a technicality. I'd use the date Ebay receive the funds. 

homi

Thrugelmir said:

When you decide to withdraw the funds is a technicality. I'd use the date Ebay receive the funds. 

Thanks for taking the timeout to reply , so if the payment arrives in my bank  after the 5th of April I still use the date for when the payments were made on my tax return  . 



 

seatbeltnoob

It's much much much simpler to use the bank deposit date as the money received date. Than try and deconstruct their payment statements because the fees and such are all over the place.

It's because of how complicated paypal statements and ebay statements are that I have my approach towards them.

I am OK with cashflow. I just get a monthly deposit from ebay, so I have 1 sales entry and 1 fees entry for the month. You can opt for bi weekly or weekly deposits if you like. It's make accounting so much simpler.

With paypal, their "statements" don't have a running balance. E.g. you have £20 balance, make a £5 payment therefore you now have a £15 balance.

Because they dont have running balance it makes reconciling so difficult. So I do frequent deposit so The balance showing in the accounts with drop to £0. If the accounts stop showing a frequent £0 balance, and starts showing a recurring £1.17 balance for instance I know I've missed a payment or mistyped something so I can trace it back to whwn the first time the £1.17 balance showed up.

to answer your question, it could be either. You choose your accounting method. You either go on a cash basis or statement date.

 Money is money, it wouldn't really make much difference on when you record the sales. if you delay the payments it will just roll over to the next month and catch you up then.

If you're trying to avoid VAT registration then you need to drop your sales down by a good margin to avoid going over. Maybe increase your prices so you dont convert so much and drop by a couple of grand.

You're delaying the inevitable, and sailing so close to the threshold will tip you over when you get a sudden increase in sales (when competitor runs out of stock or something).

homi

seatbeltnoob said:

It's much much much simpler to use the bank deposit date as the money received date. Than try and deconstruct their payment statements because the fees and such are all over the place.

It's because of how complicated paypal statements and ebay statements are that I have my approach towards them.

I am OK with cashflow. I just get a monthly deposit from ebay, so I have 1 sales entry and 1 fees entry for the month. You can opt for bi weekly or weekly deposits if you like. It's make accounting so much simpler.

With paypal, their "statements" don't have a running balance. E.g. you have £20 balance, make a £5 payment therefore you now have a £15 balance.

Because they dont have running balance it makes reconciling so difficult. So I do frequent deposit so The balance showing in the accounts with drop to £0. If the accounts stop showing a frequent £0 balance, and starts showing a recurring £1.17 balance for instance I know I've missed a payment or mistyped something so I can trace it back to whwn the first time the £1.17 balance showed up.

to answer your question, it could be either. You choose your accounting method. You either go on a cash basis or statement date.

 Money is money, it wouldn't really make much difference on when you record the sales. if you delay the payments it will just roll over to the next month and catch you up then.

If you're trying to avoid VAT registration then you need to drop your sales down by a good margin to avoid going over. Maybe increase your prices so you dont convert so much and drop by a couple of grand.

You're delaying the inevitable, and sailing so close to the threshold will tip you over when you get a sudden increase in sales (when competitor runs out of stock or something).

Thanks for the advice ,  I am normally quite a bit under but last year when lockdown ended ( last april )  my sales took off and the the surplus stock which went unsold from the previous year  I sold ( at cost )  in addition to my standard sales.

With Paypal I use to go with when the payments were received and always withdrew the funds into my account on the final day of the tax year .

Because payment lands into my account on the first Tuesday of every month  , I have items which were made on the 5th of april but paid into my account in May .