International Sales Taxes collected by Ebay...are they classed as turnover for self assessment?

goodfella66

When selling an item abroad, let's say the USA as an example, Ebay collect and pay an international sales tax on behalf of the buyer at the point of payment. This amount is added to my gross amount by Ebay. As this amount never reached my account and is really a tax between the buyer and their country, am I right in thinking I wouldn't expect it to go towards my self assessment.

If that is the case, how do I process it? Do I class it turnover and process the amount as an expense, or do I just keep a record and deduct the amount from my turnover?

I hope I have made my question clear.

goodfella66

In addition to what I have written above, the extra that Ebay's Global Shipping Program charge to ship abroad seems to get added to my gross turnover too and I'm thinking surely that is Pitney Bowes turnover, not mine (I never see that money)…so should that be deducted too?

se2020

It's only money that you actually receive that counts towards your turnover.

The ebay 'sales' figure shown is not much use for doing your self assessment as it shows the total value of sales (basically what buyers paid) including postage and even items that were paid for then cancelled or refunded.

Easiest way to get the correct figures is from the report ebay send you on the 31st January which is a copy of what they submit to hmrc. This shows the actual figure you need to use for turnover/income.

I don't know if you can find a part-year report on ebay anywhere?

If the 31st Jan does not work with your accounting period you could always tick the box on the tax return saying 'this return includes provision figures' and put in the notes that you are 'awaiting ebay figures available 31/01/' then edit the return at a later date. Bit of hassle but probably a lot easier than recording the details from every sale individually.

I've not messed about with ebay sales reports much but if you use a desktop PC there are a lot of reporting options available.

You may just be able to select what data you want and download a custom report.

I do it the easy way, and have an account just for selling and don't buy anything on that account.

Basically, whatever funds are withdrawn from ebay into my bank account is my turnover figure. Its easy to go onto my banking app and see the total recived from ebay over any required date range.

goodfella66

Thanks for the detailed reply. I thought it was a bit unfair putting the GSP figures and sales tax into the gross turnover.

I tend to do it on a daily basis using the awaiting despatch form and checking against the monthly reports (and other reports) Ebay don't seem to deduct them charges. This makes the figures going to HMRC look artificially high.

Regarding your last sentence, I don't think the money going into your bank account is classed as turnover, that would be the profit. HMRC usually want a gross turnover figure for self assessment (mainly for eligibility for VAT), an outgoings figure and the profit figure.

se2020

The figure they send to hmrc is actually correct.

It's only the one they show you on the ebay site that is high. Look at the report they emailed you on the 31st Jan and the figures they reported to hmrc are starred on that.

No. The money coming from ebay into my account is turnover. (As I don't use that ebay account to buy anything)

So, if I buy an item locally for cash for £15, sell it on ebay for £22.70, ebay rake £2.70 for the postage. Pay out £20 to my bank.

The £20 is turnover.

£15 is expenses (plus 50p for packaging) so my profit is £4.50.

the_lunatic_is_in_my_head

Go to payments and look at the actual transaction breakdown OP.

Chances are eBay are giving you the sales tax (so they can charge you FVF on it), then deducting it and if that's the case I think it should be recorded as an input and an output.

martindow

If you are a limited company you probably need to follow a certain procedure as the_lunatic suggests. For a sole trader, which is probably what the OP operates as, it is much more flexible and a simple net figure is fine. HMRC will only be concerned that you are declaring all of the money you receive and not over-claiming expenses to get your taxable total.

goodfella66

https://forums.moneysavingexpert.com/discussion/comment/81881066#Comment_81881066

I think you're correct. I am a sole trader so I think I may record the full amount and then deduct the sales tax and the difference between my P&P and the GSP amount. I didn't think it was right declaring the full amount as turnover when the sales tax never reaches me (or even this country) and the GSP amount is a service by Pitney Bowes which once again doesn't reach me and is surely classed as their turnover not mine.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81881066#Comment_81881066

As a VAT registered business VAT doesnt appear in our P&L or tax returns, we collect it on behalf of HMRC but it's never our money. It's also why in insolvency the likes of VAT are treated differently to things like Corporation Tax.

Tax ultimately is a complex topic, particularly when you get into the international view, and hence why there are dedicated experts on this that accountants defer to. Certainly the majority of sales tax operate similarly but wouldnt want to say all do. I know our systems at work have a wide range of options on how taxes work and if they should be considered part of revenue or not, if the customer or we are paying them etc etc

se2020

Just find the email ebay sent you on the 31st of January and download the report from there.

That tells you what they report to hmrc (the 'consideration' amount)

I think it would be sensible if the figures you submit on a tax return match ebays :)

Obviously if you have other income apart from ebay you'll have to add that as well..

goodfella66

https://forums.moneysavingexpert.com/discussion/comment/81881785#Comment_81881785

I've just checked that. If I take off the international sales taxes and GSP difference away it's not too far away so I'm quite happy with that. 👍️

Thanks.