Possible Widespread eBay VAT Error Affecting UK Sellers – Seeking Others Impacted
Summary: b-uniqueforless shared a persistent issue with eBay, where they have been misclassified as a non-UK seller, leading to incorrect VAT deductions despite being deregistered. They described the financial impact of eBay adding 20% VAT to their prices and shared challenges with eBay’s support in resolving the issue. They mentioned HMRC's stance that eBay has no right to collect VAT and are advised that this may be a legal matter. papso22 questioned the focus on VAT deregistration, while fargvs suggested possible reasons based on account history, such as initial registration outside the UK.
Has anyone else had eBay incorrectly classify them as a non-UK seller, even though they're UK-based/uk registered?
For the past 7 months, eBay has been deducting VAT from my sales and remitting it to HMRC on my behalf, despite me being VAT registered and already paying my VAT directly to HMRC.
I've spent months trying to get this corrected, but they continue to do it. HMRC has confirmed they never instructed eBay to treat my account this way, yet eBay insists it's acting on HMRC's instructions.
eBay also increased my prices by adding a further 20% VAT on top of my listed prices. This made my items appear much more expensive to buyers and had a significant impact on my sales. I eventually had to deregister for VAT because of the effect it was having.
I have manually checked and verified that no listings have a 20% VAT rate set. Furthermore, eBay support explicitly updated my profile backend to 'Not Registered' after accepting my official HMRC deregistration proof, yet continued to ignore why the 20% was initially being deducted and remitted on my behalf being a uk seller, despite this, 20% is still automatically added to prices and deducted from my payouts!
Frontline support and vat Compliance team are completely useless, Over the last 7 months, frontline support just opened tickets promising a specialist would contact me (nobody ever has), vat compliance told me just to contact frontline and refused to help despite telling them iv been going round jn circles for months , the latest communication i had from ebay was yesterday, they just told me to contact HMRC
HMRC explicitly confirmed that because I am deregistered, eBay has no statutory right to collect VAT on my sales and advised that if eBay refuses to reimburse the wrongfully vat payments they have been taking from me, it becomes a civil legal matter
Citizens Advice has also reviewed the situation and confirmed this is a breach of contract, advising escalation straight to court.
Honestly, this feels like eBay's own version of the Post Office Horizon scandal,a massive corporation blindly trusting a faulty backend IT system
Is anyone else experiencing this? Another seller contacted me to say they had to cease trading because of this issue and the financial impact of effectively being taxed twice. I'm trying to find out how widespread this problem is?
fargvs
·2 weeks agoThoughts and comments only ---American spelling of 'Jewelry ' ( Jewellery) may be a clue --- Was this account originally registered 2012 in the USA .com site and then later transferred to the UK site before 2016 ? , if so, despite any other changes made in the UK site, the Default Registration remains in the .com USA site >
and
From similar posts over years, it seems impossible to completely remove all evidence of original VAT registration (deregistration) with reversion to non VAT registered status --- remnants will remain in the eBay account and appeals to HMRC have generally been unsuccessful.
and
Even if an item is within the UK , if either the Buyer and/or Seller is currently using or has had an account that has/was initially registered outside the UK site , then an additional 20% Import VAT and any additional delivery fee is charged.
b-uniqueforless
OP2 weeks agoUnfortunately an incorrect assumption, i have always been in the uk,never been transferred from anywhere nor from anyone
papso22
·2 weeks agoYour actual problem is why does ebay think you are not based in the UK? The deregistration is actually a red herring.
b-uniqueforless
OP2 weeks agoIm sorry but thats a very uneducated and ignorqnt comment
Calling my VAT deregistration a "red herring" is a misunderstanding of the situation.
I only deregistered because my sales had fallen below the VAT threshold. That's a legal requirement,you can't simply choose to deregister while your taxable turnover remains above it.
The drop in sales coincided with eBay adding an extra 20% VAT to my listed prices, making my products appear significantly more expensive than they actually were. So my deregistration isn't irrelevant at all; it's part of the financial impact this issue has had.
The underlying problem is that eBay has continued adding VAT to my prices and deducting VAT from my payouts despite now no longer being vat registered
And yes “Your actual problem is why does ebay think you are not based in the UK?”- is my exact issue, till date they havent provided any proof, infact ignored my 7 months worth of followups and logs