eBay UK HMRC VAT nightmare - countdown to account restrictions.

huskykiss

eBay insisting on VAT reg number or face selling restrictions.

Previously sole trader, now limited company. Combined turnover showing as just over 85k.

Accountant confirmed VAT threashold resets on changing ST -> LTD and they sent letter to eBay, however eBay say only HMRC letter will be accepted.

HMRC confirm writing letters for eBay is not a service they provide...

Has anyone tackled this situation before? Any ideas?

ProcessMatters

This is a known eBay compliance issue rather than an HMRC one. eBay’s system flags accounts based on rolling turnover at account level, not legal entity logic. When you move from sole trader to Ltd, HMRC treats that as a new taxable person, but eBay often doesn’t reset the counter unless their internal team manually intervenes.

HMRC are correct — they don’t issue “confirmation letters for marketplaces”. The only documentary proof you can realistically provide is the Ltd incorporation date, new UTR/VAT status, and evidence that the current entity is below the threshold.

In practice, people who get this resolved usually have to escalate within eBay (compliance or managed payments team), not HMRC. Frontline support won’t understand the distinction. If they won’t reset it, the fallback is either voluntary VAT registration or opening a new seller account correctly set up as the Ltd from day one.

It’s frustrating, but you’re not missing an HMRC document — it simply doesn’t exist.

prowla

Looks like eBay are making up rules and inventing documents.

The official HMRC document is a VAT Certificate, which you can download from your HMRC account.

ProcessMatters

Yes — if the Ltd is VAT registered, the VAT certificate is the only HMRC document available.

The issue people hit is when the Ltd isn’t VAT registered yet but eBay still treats the account as if the old sole-trader turnover applies. HMRC don’t issue letters confirming “below threshold”, which is where sellers tend to get stuck.

caprikid1

I went through this exact battle, lost the will to live.

The families business lost over a months trading being forced to register for VAT.

I think you either register for VAT (Flat Rate Scheme ?) or Set up a new ebay account for the new LTD company (High Risk Ebay don't like anyone creating new accounts facing enforcement action).

RFW

Have you asked your accountant if it may be worth registering for VAT. Either that or if you could register and deregister after a month or so. Your accountant would be able to work out your figures and see if that was viable. 

I know that when dealing with situations like this with Amazon or Ebay it's sometimes easier to find your own solutions.