VAT Restriction Despite Being Under the 85k Threshold?

[vene_laur]

Hi,

Just wondering if anyone else has come across this problem? Is it some kind of error? Despite being under the threshold by 11k, eBay have still decided to restrict my account. Customer service have esculated the problem to the account team, but just wanted to know if anyone else had experienced the same thing?

Kind regards

[pixiesen2012]

ebay add the value of your listed stock to your sales for the previous 12 months and if this figure is at or above the VAT threashold they will insist you register for VAT

[ile136yz]

Check with   VAT - Gov.UK regarding the Rules of Registering for VAT.

[wyattharrisx]

Im not sure that's correct otherwise I would be over but my sales are under 85k and never been asked to register stating my stock count and sales would "potentially be 85k if I sold it all". Listed stock could take 10 years to sell. VAT is based on 12 months rolling sales only not stock held

Is it possible the op is only counting the actual sales figure and not the delivery costs, which is part of the sale as noticed op charges delivery at anything between nearly 5 quid to 9 quid a sale, that could easily rack up the sales revenue

Other possibilities is ensuring it's not just a fixed 12 month period been looked at but the rolling 12 months

If you are absolutely under the threshold, ask eBay where they are getting the figures from or you could even go to your orders, change the status toall orders, change to date to 12 months and see what the total is

[floral.lines.supplies]

You can also find your total sales (which includes the postage costs) in 'seller level', this will be the figure ebay uses when you hit the VAT threshold.

[cobwebcottage]

Hi Pixie,

Could we have more information and clarification if this is how Ebay are calculating VAT. If it's correct, we need to know what we are working towards to be able to make an informed decision about the future of our businesses.

Maybe confirmation from a Mod?

[papso22]

We have deduced that from previous threads as it seems the only rational answer to the conundrum of exactly what triggers eBay getting all VAT sensitive.  It clearly isn't the same as used by HMRC as per the VAT Act.  

The reason eBay will err very much on the side of caution is because they are liable for the VAT when sellers get it wrong/are not registered when they should be.  That will be why (we assume), eBay adds current listings to past sales to get to the 85,000. 

[sheba-knows-best]

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@wyattharrisx wrote:

Is it possible the op is only counting the actual sales figure and not the delivery costs, which is part of the sale as noticed op charges delivery at anything between nearly 5 quid to 9 quid a sale, that could easily rack up the sales revenue

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A very good point you need to add postage and - if you use GSP - add the international postage that ebay charges and that you never even get told, let alone see! For months I was railing (internally) at ebay's sales figure which was getting me dangerously close to the threshold, whereas my own figures (usually extremely reliable) were still a long way off, and then I figured out ebay was adding in GSP pstage which ain't cheap 😞

[81naut_51]

On a side note, I noticed that in the "Sales" under the Performance tab- the amount includes:

1. The sale price of the item

2. The postage charged

3. Any sales tax collected (if you sell to USA for example where eBay collect 0-10% dependent on state)

Am I correct in thinking that the VAT threshold should not include foreign sales tax collected by eBay and only numbers points "1 and 2"?

If you sell to a customer in Canada/Mexico (where eBay do not collect sales tax directly) then sales tax from these sales are obviously not included in eBays "Sales" tab. The customer does end up paying the sales tax at the point of delivery if any is required to be paid. A bit like if you when you buy something from overseas and you get dumpstered with a "fee to pay" card by Royal Mail!

This is NOT via GSP

[4_bathrooms]

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@81naut_51 wrote:

On a side note, I noticed that in the "Sales" under the Performance tab- the amount includes:

1. The sale price of the item

2. The postage charged

3. Any sales tax collected (if you sell to USA for example where eBay collect 0-10% dependent on state)

Am I correct in thinking that the VAT threshold should not include foreign sales tax collected by eBay and only numbers points "1 and 2"?

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Correct; any sales tax eBay is responsible for charging and remitting does not count towards your turnover for VAT purposes.

[81naut_51]

However eBay still counts this foreign sales tax in the "Sales". Would this not skew the numbers if eBay use this figure to "check" if you are required to be VAT registered?

For example if you sold alot to a certain state in the US that charges lets say 10% tax. Your overall sales would be higher by ~10% when counted by eBay. Not sure if the same applies to Europe (where VAT is ~19-22%)

[4_bathrooms]

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@81naut_51 wrote:

However eBay still counts this foreign sales tax in the "Sales".

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Probably because the final valuation fee eBay charges is calculated on the total price paid by the buyer including any local sales tax eBay was obliged to charge and remit.

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@81naut_51 wrote:

Would this not skew the numbers if eBay use this figure to "check" if you are required to be VAT registered?

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It's possible eBay (incorrectly) records this figure as the seller's eBay turnover. When the seller's eBay sales are reported to HMRC via Connect it may be that HMRC sees a turnover approaching £85K then requests eBay restricts the seller's ability to sell until eBay has checked the seller's VAT registration status. I remember a thread where a seller had a rolling turnover of just over £50K and was similarly restricted so clearly eBay are using something other than a seller's actual turnover for VAT purposes in some (if not all) cases.  

[81naut_51]

Ahh makes senses with the FVF part. I do see alot of posts of sellers using these sale figures for their accounting and wasn't sure if they realised that sales tax is lumped into it if they export internationally.

[jow1995]

hi, i have just got off the phone to a very helpful eBAY AGENT. Too my surprise the postage costs  and vat ebay charge on GPS are added to your turnover. But the total sales are included in your total Ebay will warn sellers before restrictions when getting close to the VAT limit.

I have turned off the GPS OPTION  for a while until sales come down,

hope this helps

[jow1995]

please read my above reply for clarity on this matter

[bignmn]

My listings value even total yearly selling very far from the 85k Threshold, but ebay has caught me, my account of US but have dealing with UK then what is your advice here?

[4_bathrooms]

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@bignmn wrote:

My listings value even total yearly selling very far from the 85k Threshold, but ebay has caught me, my account of US but have dealing with UK then what is your advice here?

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You're registered in Bangladesh selling items located in the UK. As a non-domestic seller with UK-held stock your threshold for VAT registration is £0 - i.e. you are obliged to register for VAT to sell anything.

Under the rules you will be making a zero-rated supply to eBay UK who is then deemed to be the seller to the UK buyer. Your VAT registration is to ensure that import duty & import VAT is being correctly declared on your UK-held stock during importation.

[magpiecorner1]

eBay also watch to see if your sales are increasing.  They don't wait until you reach the VAT limit before taking action, they calculate if you are likely to go over in the near future based on increased sales.

[sheba-knows-best]

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@jow1995 wrote:

please read my above reply for clarity on this matter

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I don't need clarity. I think you have simply repeated what I made clear?  And it is GSP not GPS.

[watchfan700uk]

Im not sure that's correct otherwise I would be over but my sales are under 85k and never been asked to register stating my stock count and sales would "potentially be 85k if I sold it all". Listed stock could take 10 years to sell. VAT is based on 12 months rolling sales only not stock held

Ebay DO NOT include the value of all inventory listed. They did not for me in the years I was under the limit with no VAT number and with £1M worth of stock listed.