VAT and ebay

sheramber

https://www.ebay.com/help/selling/selling/vat-obligations-eu?id=4650#:~:text=collect from consumers-,eBay will use the values provided by you when listing,sold in the delivery country

Effective 1 July 2021, a single EU-wide distance selling VAT registration threshold of EUR 10,000 will apply and replace the country specific intra-EU distance selling thresholds. This means that if you make sales to non-VAT registered buyers in any EU countries, and the combined total of those sales exceeds EUR 10,000 (£8,818), you will need to collect VAT in all EU countries based on the delivery address. To do this you will either have to register for VAT in each of the EU countries where you make sales, or use the EU VAT One Stop Shop....................

Jazzguy1

Thanks all
It seems for my particular business i need to use the Global accounting Scheme for VAT .
If anyone uses this i would like to ask a few questions

Grumpy_chap

Jazzguy1 said:

Thanks all
It seems for my particular business i need to use the Global accounting Scheme for VAT .
If anyone uses this i would like to ask a few questions

I think you would really benefit from engaging the professional services of an Accountant.

Jazzguy1

Yes i do as ebay need a certificate of exmption from HMRC which they do not issue.
Apparently a letter is not goo d enough.
I i have no vat number ebay will not let me sell,  if they say i need to bw registered then i have to, whether under the threshold or not

Jazzguy1

On another point ebay do not let you add vat to the finished auction price, only the starting price
So if an item sells for the starting price of say 9.99 then that is fine you have included vat in that to cover yoyr vat costs. , but if it eventually sells for 150  then you cannot add vat to that,  so you have to pay vat on the 150   which is in effect an extra 20 % tax on top of your income tax

JCS1

VAT and income tax are two very different things.

I do think you need the advice of an accountant.

Grumpy_chap

Jazzguy1 said:

On another point ebay do not let you add vat to the finished auction price, only the starting price
So if an item sells for the starting price of say 9.99 then that is fine you have included vat in that to cover yoyr vat costs. , but if it eventually sells for 150  then you cannot add vat to that,  so you have to pay vat on the 150   which is in effect an extra 20 % tax on top of your income tax

No, it is not.

If you sell for £9.99, that is £8.33 + £1.66 VAT = £9.99

If you sell for £150, that is £125 + £25 VAT = £150

The VAT is 20% of pre-VAT price but only 16.6% of the VAT-Inclusive price.

If you have accounted for cost, necessary profit and VAT in the starting price of £9.99 but the auction closes at £150, then everyone wins.
You win by £125 - £8.33 = £116.67
VAT wins by £25 - £1.66 = £23.34
It is entirely appropriate that there is more VAT (value-added tax) if you sell having added more value.

That is only the OUTPUT VAT.  From the amount you pay to HMRC, you can deduct any INPUT VAT, for example if there was an element of VAT in the eBay fees, packaging materials etc.

I think it would be well-worth you engaging the services of an Accountant to explain things fully and help you set up the necessary record keeping to minimise the nett VAT that your trading business pays.