eBay to introduce VAT charges for UK sellers
eBay has confirmed that it will start charging 20% VAT on its fees to businesses trading in the UK, in line with HMRC’s tougher stance against online traders who fail to register for VAT returns
The measure, effective from 1 August, follows a restructuring by eBay resulting in UK customers no longer contracting with eBay Europe S.a.r.l (its Luxembourg entity) but with eBay (UK) Ltd. Further information can be found on the eBay website here.
eBay has explained that it currently applies UK VAT at the standard rate of 20% to all fees incurred by UK based sellers that are not registered with eBay as a business seller. The company also warned that business sellers who are not already paying VAT on eBay fees would find VAT will start showing on eBay invoices issued after 1 August 2017.
Charities that sell directly through eBay should note this additional cost. Charities may also wish to monitor the knock-on effect this has for donors that donate all or part of their proceeds from eBay sales to charities.