Ebay charging large amount of VAT to buyer on Digital gift card.

chompie

I recently got a PS5 gift card as a present that i do not need/want, so i have put it up for sale.
I am aware that lots of scammers try and buy these from hacked accounts so i am trying to sell it for the third time now. and every time it has been cancelled.

However today i saw that the buyer paid, asked for it quickly (always a red flag) and then requested to cancel.

So when i went to look at the cancel it said "purchased by mistake" (but why pay for it?)

then i noticed that the PSN card (value £50) sold for £45
And this is how the payment is broken down in eBay
Subtotal £45
Buyer protection fee £2.52
Postage £1.88 (i thought i had free post selected but maybe an error on my part)
and then the real kicker
VAT £9.38

That seems crazy to me that to sell a gift card costs that much in VAT.
Is that a correct amount for a gift card? it seems way higher than any VAT on anything else i have sold recently (which is not much...)

I am a private seller.

chompie

And i am UK based as is the Buyer and the Gift card is a UK £ value.

Spoonie_Turtle

That looks to be a about 20% VAT so no higher than ordinary VAT.  No idea why it's being charged on a private UK to UK sale though.

mjm3346

£45 plus £1.88 = £46.66 then 20% (£9.38)

chompie

Spoonie_Turtle said:

That looks to be a about 20% VAT so no higher than ordinary VAT.  No idea why it's being charged on a private UK to UK sale though.

So do you believe as a private UK seller this VAT charge should not be there?

Spoonie_Turtle

chompie said:

Spoonie_Turtle said:

That looks to be a about 20% VAT so no higher than ordinary VAT.  No idea why it's being charged on a private UK to UK sale though.

So do you believe as a private UK seller this VAT charge should not be there?

I don't know enough to be able to say that; just that I don't know of any reason they're charging VAT.

chompie

I just looked at the last gift card i sold and it was 4 months ago and had no VAT.
I'll have to get onto eBay CS later to find out why.

chompie

They have escalated the matter.
but i noticed 1-3 of my sales have been subjected to a VAT charge for no apparent reason.

RFW

chompie said:

They have escalated the matter.
but i noticed 1-3 of my sales have been subjected to a VAT charge for no apparent reason.

I'd check the category you were selling it in and any Ebay rules on gift cards.

It's not my area but I do know there shouldn't be VAT on gift cards. The VAT, if applicable, is paid when the gift card is redeemed. Also if there's no VAT on the item there shouldn't be on the postage.

https://www.gov.uk/government/publications/changes-to-the-vat-treatment-of-vouchers/vat-treatment-of-vouchers-from-1-january-2019

savergrant

RFW said:

chompie said:

They have escalated the matter.
but i noticed 1-3 of my sales have been subjected to a VAT charge for no apparent reason.

I'd check the category you were selling it in and any Ebay rules on gift cards.

It's not my area but I do know there shouldn't be VAT on gift cards. The VAT, if applicable, is paid when the gift card is redeemed. Also if there's no VAT on the item there shouldn't be on the postage.

https://www.gov.uk/government/publications/changes-to-the-vat-treatment-of-vouchers/vat-treatment-of-vouchers-from-1-january-2019

Some postal services are vatable, some aren't. It is not related to whether the contents are vatable. If ebay have purchased the label on your behalf the price will show a vat breakdown (simple delivery does). What service is the postage, presumably tracked as you are way of scammers?

RFW

savergrant said:

Some postal services are vatable, some aren't. It is not related to whether the contents are vatable.

HMRC would beg to differ.

An additional charge for delivery will follow the liability of the goods.