HMRC exemption certificat for VAT - Sole Trader under £85 000

[wwmeteorites-25]

Hello,

eBay restricted my sale, preventing me to put anything on sale, as they ask me a UK VAT registration number.

That said, I am a sole trader, and my yearly turnover is under £85 000, meaning that I have not to enroll to the VAT program.

I did rise the matter to eBay that, even aknowledging my statement, says that they cant do anything unless I provide a "VAT exemption certificate from HMRC".

Research done, HMRC do not in any case provide such certificate for sole trader under the threshold.

Basically eBay is asking for  a prove I am not VAT registred because I have not to be, and HMRC do not provide such document.

I went full circle with eBay customer service few times, always ending with asking me again me that non-existing document, or say they are escalating the matter with a 48h-72h answer time (meaning being let alone and without further contact with them).

Ebay was provided with my full tax return for the last fiscal year, but not sure they even looked at it, even if it shown my turnover < threshold, black on white.

I am on a Kafka logic loop.

Anyone have been on that situation ?

Thanks

[myriad*seller]

I think the problem is geographical rather than turnover related

Some of OPs listings are showing in $ dollars, meaning the system for some reason thinks OP is overseas despite the item location showing as Shetland UK

Did you list items on .com? 

If eBay think you, or your goods are overseas they will force you to register for VAT

I would end the listings showing in $ and relist making sure you list on .co.uk not .com. 

You need to sort those $ listings out before eBay will stop asking for VAT registration

I think the turnover thing is a red herring 

Unfortunately, now the VAT reg has been triggered, it may be hard to turn it off, as this is eBay... but you definitely need to sort those listings to have a chance of stopping this, 

[potters_uk]

Im concerned by the wording.  If someone is exempt then it suggests by definition that you would normally be paying VAT under your turnover but have been given exemption from doing so.  If you earned enough to pay VAT you would be liable to pay and have to deal with it.

How can you be exempt from paying something that you are legally required not to have to pay under the rules. Its a bit like saying i'm exempt from paying rent on my house because I own it.

[myriad*seller]

See listing Meteorite NWA 11199 for an example

eBay think you are shipping this from the USA (and also from Shetland!)

Which means you have to be VAT registered.

You need to sort out the listings that erroneously state you are posting from the USA, so that you aren't required to register for VAT

This has nothing to do with your turnover and all to do with where eBay perceives you are listing from 

Overseas sellers or UK sellers who list items as overseas, all have to register for VAT for import purposes, nothing to do with turnover. You could sell an item for 1p, (where either the item or the seller are overseas) and would still have to register for VAT for import purposes. 

[therenewalworkshopltd]

One of the first things I noted and have not had a response to, is that the listings are showing in dollars.

The op seems to be ignoring this one.

Hence asking about location and such like, with details setup on Ebay itself and the listings.

[myriad*seller]

Yes, I think this is the reason for the VAT registration request

Nothing to do with turnover

eBay CS know nothing so they just assumed it is turnover-related as they can't actually see the reason

The perceived location of the item/seller is the reason for the VAT reg request, I agree. 

Until OP sorts this out, the problem will persist. 

[myriad*seller]

This thread may be pertinent to your problem 

https://community.ebay.co.uk/t5/Seller-Central/UK-Ebay-listing-failure-now-showing-as-selling-in-Ame...

[4_bathrooms]

---

@magpiecorner1 wrote:

If they are asking for an exemption certificate they are asking for verification that your goods are exempt from VAT.

---

A VAT exempt business is one that only sells VAT exempt goods or services or a business that mainly or only sells zero-rated items that has applied for an exemption and been granted one - In the latter case the business would likely receive a letter confirming their successful application for exemption. I don't think such an "exemption letter" is what eBay wants in either case; I think eBay believes (rightly or wrongly) that both posters should be registered for VAT unless they have something from HMRC that unequivocally states otherwise.

@wwmeteorites-25 : Are you domiciled in the UK for tax purposes? If you are domiciled in the UK do the details in your business details match exactly the details you use when you file your self-assessment? 

@vwgolfman333 : Can you also check your business details match? You are currently displaying a trading name (which could easily be confused with another business) rather than a legal business name. Also, do you trade as a sole trader or an ordinary partnership? 

My gut feeling in both cases is something hasn't matched when eBay has cross-checked records like when they destroyed all those VAT registered sellers' accounts a year or two ago. The problem then was the sellers had entered their trading name rather than the registered company name in the "Business name" field. eBay never explained what the sellers needed to do; only that their computer said "no" and after restricting the affected sellers' accounts they ended all the affected sellers' listings which also wiped out all the associated sales history the listings had as well.

[magpiecorner1]

I said I don't think eBays knows what they want when asking for an exemption certificate!

[magpiecorner1]

It doesn't mean that to HMRC.

They have VAT applicable at 20%, most goods and services, vat applicable at a lower rates, such as utilities, zero rated, including children's clothing and VAT exempt, certain services, including some postal services and parts of funerals.

Under the threshold there is no requirement to register, but nothing to stop anyone registering under the threshold, in fact it can be very worthwhile.  B2B businesses and companies will generally go VAT registered from day one, because VAT isn't an issue when selling.

[4_bathrooms]

---

@magpiecorner1 wrote:

I said I don't think eBays knows what they want when asking for an exemption certificate!

---

I realise that; I apologise if I didn't make my point very well and appeared to be trying to contradict you.

To explain, as far as I am aware there is no such thing as an "exemption certificate". A business that only sells goods or services that are exempt from VAT wouldn't even have an exemption letter as they would have had no need to apply for an exemption in the first place. A business that mostly or only sells zero-rated items can apply for an exemption if they are approaching the threshold and I believe would receive a letter to confirm their application had been accepted. It would just be a letter though; it would not be an "exemption certificate" which I have seen several affected posters mention before. I agree with your view that this is almost certainly not what eBay are even trying to ask for; they're asking for something that simply doesn't exist i.e. a HMRC document confirming the business isn't required to be registered as it is under the threshold.

For what it's worth I don't think HMRC are going to be able to help either poster. In these cases - where the seller is way below the threshold - something clearly triggers eBay to request a VAT number or an "exemption certificate". My gut feeling is the something can most likely be found in the affected accounts' business details; i.e. a business name not matching. 

[vwgolfman333]

I've checked everything, if I calculate my sales from the last 30 days and multiply that by 12 then still not even 50% of the vat requirement, if I do the 90 days and calculate that then still not even half of the requirement.

i honestly don't think eBay knows what they want or why they even want it. They haven't given me a specific reason on why. I don't have any stock in any other country. What they did tell me to do was upload a vat exception letter where I would upload my vat details, so they want me to upload a there instead of the vat number but such a letter doesn't exist. 
I did speak to HMRC and they said I don't require anything and they wouldn't issue anything, they would only issue something if I was expected to go above the threshold but I'm not, they basically told me eBay don't know what they talking about 

[therenewalworkshopltd]

There actually is such a thing as Vat exception.  But it is basically about when you are close to or going to exceed the limit and ask HMRC for an exception.  So that does indicate that Ebay think you are close to exceeding the limit.

You are however calculating your turnover incorrectly.

You need to total the sales for the preceeding 12 months including things such as postage etc.

Just multiplying the current month by 12, does not give you a correct figure.  Or doing the same with a quarterly figure.

Surely you have some sort of accounts where this information is available to you?

Having stock in another country has no bearing on this, but does affect registration in other countries.

Do you use the GSP program?  Have you allowed for the extra fees on this, as it will be included in turnover?

[4_bathrooms]

---

@vwgolfman333 wrote:

I've checked everything, if I calculate my sales from the last 30 days and multiply that by 12 then still not even 50% of the vat requirement, if I do the 90 days and calculate that then still not even half of the requirement.

---

Based on everything you have posted including your rolling 12 month turnover eBay are not contacting you because of your turnover. 

In the Autumn of 2022 numerous VAT registered sellers started posting because eBay had messaged them requiring they update their VAT details within 30 days else their abliity to sell would be restricted until they did. They checked their VAT numbers and they were entered correctly but still eBay insisted they "update their VAT registration details". I looked at a few of their accounts and noticed they had something in common - the business name shown in the "business information" section of their listings didn't show the legal business name but a trading name; i.e. instead of "Registered Company Ltd" it was "MyCoolTradingName".

The real issue was when this was checked with HMRC the business associated with the VAT number was "Registered Company Ltd" not "MyCoolTradingName". Myself and others pointed this out but one poster in particular insisted this wasn't the problem because she had supplied her details to eBay years ago so it couldn't possibly be that. Anyway, as it turned out it was exactly that and the sellers who didn't update their business details found that eBay deleted all their listings with no means of recovering them nor the associated sales history even when their correct business details had been supplied. I can no longer provide a link to the thread from this board as threads that don't receive a reply for 6 months are "archived" (meaning they vanish into the ether) but I did find this announcement on eBay India's community boards to prove it happened.

My guess is you have a similar problem; I suspect eBay have had some sort of nudge from HMRC because they are trying to match your trading name with your UTR. This won't work and because "tax" was mentioned eBay heard "VAT" and panicked because HMRC holds online marketplaces jointly and severally liable for the VAT obligations of it's sellers.

If you check your business information section in your account settings you will see a variation of the below. You most likely need to complete the fields correctly so eBay is passing your legal business name (not your trading name) to HMRC. Note the separate fields for "Business name" and "Doing Business As (DBA)". The exact fields you will see will depend on the business type; a sole trader will see different fields to a corporation (company) for example.

    

[ukfab12]

Hi Have you had any luck sorting this out I have the same problem contacted HMRC on twitter and the relay i got  was 

HMRC Customer Support

@HMRCcustomers

·

3h

Replying to

@jeremycrow92003

We don't have a letter for this, All you'd be able to do is send something like a Tax Return or Tax Year Overview if your registered for self assessment to demonstrate what your income actually is. Steve