07 June 2017
If you buy and sell online, then one of the most popular marketplaces to do so is eBay.
If you buy and sell online, then one of the most popular marketplaces to do so is eBay. As of this summer, things are set to change with the retailer. Sellers in the UK with a turnover of more than £85,000 will be asked to pay VAT on their fees when the online marketplace restructures.
Currently UK sellers pay fees to a Luxembourg subsidiary but from August money will be processed through eBay’s UK business and will be subject to 20% tax.
Most private individuals who use eBay will not be affected and there will also be no extra costs for most business sellers that are already VAT registered. However, traders that have a business account with eBay but have not registered for VAT will be affected.
The company said the move reflected changes following its split from digital payment firm PayPal in 2015: “You’ll begin paying 20% UK VAT to eBay (UK) Limited on taxable fees and won’t be able to reclaim VAT paid unless you register for VAT with HMRC.”