VAT Deregistration

[watchfan700uk]

My rolling 12 month sales total is well under £80K and I want to deregister.

I have been watching this board for some time now and noted how some have had accounts suspended or even deleted over this. I would obviously rather continue paying vat if deregistering is going to cause me problems. But I don't see why I should be vat registered otherwise.

So what to do? 

I will probably phone ebay tomorrow to speak with a rep - though what the rep says and what Ebay do could be different.

Any comments would be appreciated.

[palison_123]

Just de-regiregister with HMRC and send a Special Delivery letter to let Ebay know and your clear or phone up and record the telephone call.

If Ebay don`t remove the the VAT registration number from your account then its on them not you.

[4_bathrooms]

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@palison_123 wrote:

If Ebay don`t remove the the VAT registration number from your account then its on them not you.

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It isn't as simple as that. A seller can edit or remove their own VAT number but this won't stop eBay demanding a new one. HMRC holds online marketplaces jointly and severally liable for a seller's responsibility to display a valid VAT number when one is required.

This makes eBay quite paranoid about the matter which seems to have created a problem: when a seller deregisters they seemingly have no way of proving this to eBay. In previous threads sellers who deregistered were asked to provide proof from HMRC they had deregistered despite the fact HMRC doesn't provide any such proof (they only provide proof of registration). The end result being affected sellers either remaining registered unnecessarily or having their selling privileges suspended until a VAT number was provided.

[typo_lee]

VAT threshold is 85k btw 

[papso22]

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@typo_lee wrote:

VAT threshold is 85k btw 

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No-one has said otherwise.

[palison_123]

OP already has a VAT number ,so telling HMRC and Ebay is the correct way to go .

When OP deregisters for VAT ,HMRC will confirm this in his VAT online account or by letter.

Ebay do stop sellers from listing more if they are approaching the VAT thresholds but at the same time they will ask for a VAT  number or confirmation that the person is no longer required to pay VAT . 

OP will have this to upload should he be required to do so?

If Ebay don`t respond in a professional way then they will be responsible .

I understand totally OP fears,(and where 4bathrooms is comming from) as I can see that Ebay don`t always respond in the correct way .

As in  recently ...they told us via customer service to put your T/A names for VAT purposes when infact  we had to put your own names.This led to accounts being suspended and people losing money and thier mental health but they did finally get some compensation .

Its a difficult one for OP but there is no way he should pay VAT when hes under the threshold and at least if he does things properly and can prove to a court that he informed Ebay and HMRC he might have some recourse. 

If you want to deregister  for VAT thats what you need to do .

[papso22]

That's all well and good, but the OP is well aware of what can go wrong, which can include losing your ebay account.  If that happens there is no third party to complain to, or to put it right. 

There is no legal right to an ebay account, private or business. 

It's a risk the OP needs to weigh up.

[palison_123]

@papso22 

I understand your comments totally ...Its another way Ebay fail their sellers .

[magpiecorner1]

Was many years ago that we re-registered two business with Inland Revenue, but both times we received a form detailing the date of re-registration.  Of course all relevant VAT information was on the form. 

I would wait for this before speaking to eBay and contact them for details to both upload a copy and to send a hard copy.

[watchfan700uk]

I suppose in the worst case scenario I could just re-register.

If I am going to be limited - that is fine - as I will set my inventry totals before removing my number such that I have sufficient to sell for 1 year without needing to update anything.

A previous seller said his account was limited after removing his vat number and after about a year all returned back to normal.

[watchfan700uk]

One thing I do not understand is if ebay are concerned about hmrc charging them the vat but can see a trader is below the reg limit - why the problem? All they would need do is submit to HMRC account holders sales data to prove no liability.

[watchfan700uk]

Well that's it. No turning back now.

I spoke to customer services and it seems I just need to upload the letter from HMRC confirming cancellation of vat registration.

Have applied for deregistration.

[papso22]

Fingers crossed it all goes smoothly!

[4_bathrooms]

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@watchfan700uk wrote:

One thing I do not understand is if ebay are concerned about hmrc charging them the vat but can see a trader is below the reg limit - why the problem? All they would need do is submit to HMRC account holders sales data to prove no liability.

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It's likely because the seller's eBay turnover isn't necessarily their entire (UK) turnover. My eBay turnover is now below the threshold but I'm still VAT registered as my eBay turnover is only part of my total turnover. Also, there are situations where eBay sellers must provide a VAT number regardless of their eBay turnover such as non-domestic sellers listing UK stock. HMRC's wording is "known or should have known" when it comes to VAT obligations so eBay are no doubt over-complying like they do with the Money Laundering Regulations.

It's difficult to look up the old community threads because eBay has now "archived" them but if I remember correctly the affected sellers were being asked for a certificate from HMRC to confirm their deregistration status - the problem being HMRC do not issue any such certificate. If you deregister by post you are sent a confirmation letter but if you deregister online you only receive confirmation via your VAT online/Government Gateway account.

I'm guessing eBay has since seen sense as I haven't seen a similar thread for a while and I'm pretty sure there are quite a few businesses who sell via eBay that have "downsized" and deregistered in the last couple of years.   

[watchfan700uk]

I have been told by the customer services rep in Ireland that I only need supply the emailed confirmation of deregistration. No certificate is needed.

I have also had information that vat numbers have been removed after deregistration and no letter/email was supplied or anything else - and nothing bad happened.

[papso22]

Perhaps ebay's HMRC officers have done some educating?

[katie@ebay]

Hi all,

Thank you for your replies here.

I just wanted to hop in and clarify a few things. I know VAT thresholds can be complicated and there is alot of information out there.

In regard to VAT registration numbers, eBay does not remove it, the responsibility would be on the seller to do so. Adding, removing, or editing VAT numbers would all fall under the sellers' responsibility. 

For deregistration a certificate would be needed. The seller would be required to provide a letter of re-registration which they received from the HMRC. Online documents would not be acceptable for a de-registration appeal. Our team does work to process appeals daily and HMRC will provide the letter at the request of a seller.

I hope this helps to clear up some of the questions in this thread.

Thanks,

Katie 

[4_bathrooms]

Hi Katie,

Thank you for your reply. Could you please clarify the following point:

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katie@ebay wrote:

For deregistration a certificate would be needed.

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Do you mean the seller needs to provide a certificate of deregistration? If so, HMRC does not provide such a thing. If the business deregisters by post they receive a letter confirming the deregistration - this is not a certificate. If the business deregisters online the deregistration is confirmed online - there is no letter, certificate or anything else that is sent in physical form. From HMRC's website:

"It usually takes 3 weeks for HMRC to confirm your cancellation and the official cancellation date. This is either the date when the reason for your cancellation took effect (for example, when you stopped trading), or the date you asked to cancel.

HMRC will send confirmation to your VAT online account or through the post if you do not apply online."

Can you see how requiring a "certificate" would make it impossible for a business that deregisters to prove as much to eBay?

Also:

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katie@ebay wrote:

The seller would be required to provide a letter of re-registration which they received from the HMRC. Online documents would not be acceptable for a de-registration appeal. Our team does work to process appeals daily and HMRC will provide the letter at the request of a seller.

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A letter of re-registration would only be issued if the seller re-registered or if HMRC deemed the business should not have deregistered. The only letter that HMRC may or may not send will only be the written confirmation of the deregistration mentioned earlier; it will not be a certificate.

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[katie@ebay]

Hi @4_bathrooms,

Yes no problem at all.

For the first part, HMRC do issues these at seller's request, regardless of application method. The vast majority of sellers apply online, but all have still been able to receive a de-registration. Certificate or letter can be used interchangeably here and they are one and the same. It is a physical letter/certificate that is sent out  by the HMRC and is not an online document.

For the second part, this is a typo on my end. Sorry for the confusion caused there. "Re-registration" should of been "De-registration". 

Thanks,

Katie 

[papso22]

The whole point of the Making Tax Digital agenda was to automate processes which includes preventing HMRC from having to post letters.  This is why they communicate through online accounts when these exist.  

I am very surprised that they will use their limited resources to provide something already provided electronically just because ebay won't accept the electronic version.

Rather defeats the point of MTD.