Buyer Protection is coming soon

[nutrafituk]

Just announced - finally some sort of good news for business accounts basically saying ONLY PRIVATE SELLERS will have this fee added (£0.75 fixed + various %). Hopefully that will make a difference for genuine business sellers and make those dodgy ones re-think their position:

We’re excited to announce that from 4 Feb, buyers will benefit from a brand new protection every time they shop on eBay. What’s even better is that this comes at no extra cost to you or your buyers. To give your buyers more confidence and security when shopping, Buyer Protection will be included on every purchase on ebay.co.uk. We’ve kept things simple for you, so there’s nothing you need to do to access this protection. These are all part of our efforts to make eBay the best marketplace for our community. Here’s how the recent changes will benefit you.

Why Buyer Protection is good for your business As a business seller, Buyer Protection is included for free for you and your buyers. They’ll get the protection, without the cost. With Buyer Protection, all buyers and sellers will now get 24/7 customer support where you can connect with a real person by phone whenever you need, or start a chat to get quick answers. We’ve also still got you covered with secure transactions, thanks to payments that are encrypted end-to-end and handled by our trusted payment partners.

We’re always looking for more ways to help drive sales to your business, so from 20 Jan, Coupons, Multi-buy and other discount tools will only be available to business sellers. You can look forward to more exclusive benefits in the future. Learn more about Buyer Protection What’s changing for private sellers

• We recently made changes to our fee structure so it’s free for private sellers to sell on eBay (excl. Vehicles). As part of this, from 4 Feb, a Buyer Protection fee will be added to listings from UK-based private sellers so we can make investments into these protections. This fee will be included in the item price and be paid for by the buyer. As a reminder, this is free of charge for business sellers.

• To give buyers more protection and encourage timely shipment, private sellers will be paid once the item is delivered. There’s no change for business sellers and you’ll still receive your payouts as quickly as you do today.

• We know it’s important to have a fair and equitable marketplace for all business sellers. That’s why we’re monitoring trading activities on eBay to help business sellers using a private account transition over to a business account, or restricting selling activity as necessary.

[tressygirl]

It will be the same Community Managers,  yes.

@moonspender 

[dion5feb2016]

Indeed. Let’s hope the peasants will be revolting 🤪

[tressygirl]

I definitely need more coffee thought you said Pheasants !

@dion5feb2016 

[dion5feb2016]

😂😂😂 . With my pending day I am going for a gallon!

[darth_baggins]

And the negative press has started already. Money Saving Expert on X (with a link to their site) are warning us that eBay prices are going up on February 4th. There's a comparison of how much more you'll pay on a range of items. There is quite small print saying that you don't pay extra if you buy from business sellers.

But IMO, it's just going to get round that eBay prices are all going up and people will start shopping elsewhere.

 

[jow1995]

With 15k sales in 8years, maybe an idea to upgrade to a business account. That way the new rules will not apply. 

[discre]

The difference here is in the understanding of the word ‘trade’.  ‘Trading’ and running a business are NOT necessarily the same thing despite the fact that they can be.

If you exchange any good, service, or abstract entity such as IP, for a consideration (usually but not always money) then that is indeed a ‘trade’.  If the trade is of something you acquired with the specific intention of selling to make a gain on that trade then, no matter how small the amount of that gain, you are normally liable to pay tax on the gain. The type, rate and amount of tax will depend on the type of trade and the individual’s tax status. Undertaking that ‘trade’ does NOT create a business, although the act of engaging in that trade is indeed trading.  If you engage in multiple such trades within any tax year then you could be considered to be running a business, although unless this is done with any regularity this still may not necessarily be the case.

Take an example provided by HMRC.  Someone being paid a token amount for providing casual baby-sitting services to a relative two or three times a year is technically trading and creates a gain which is taxable.  However, no-one would say the casual baby-sitter was running a business, unless they did this two, or three times a week, every week of the year.

It would be neither feasible, not economically viable, for HMRC to employ staff to monitor every such trade, although with the Making Tax Digital project they are certainly trying.  So, they have put the onus on the individual to declare ALL these trades. By way of an incentive, HMRC provides a ‘Trading Allowance’ of £1000 of turnover before declaration of these ‘trades’ becomes necessary.  This ‘Trading Allowance’ would cover such income as that earned by the casual baby-sitter even though they are not running a business.  Same applies to my example of you selling an old bike.  It may be a trade and and by doing it you would indeed be trading but it’s not a business.

[padanpcparts]

The £1000 allowance applies to private sellers? I thought it was just an extra allowance for business sellers. I mean...these days you sell a single used electrical item and its sometimes over £1k. 

[papso22]

It is a trading allowance, I.e for traders.

[discre]

If you are a private seller selling your own personal items (chattels) then there is no tax to pay on them anyway, unless the value of an individual item is £6000 or greater, so you have no use for the 'trading allowance'.

If you are a 'private seller' selling items for gain then you should have an eBay Business Account in any case. 

A business masquerading as a private seller is committing a criminal offence.

[padanpcparts]

Weird post, I am a business seller. Thanks for the random telling off. 

[discre]

Apologies if it came across that way.

You asked the question 'The £1000 allowance applies to private sellers?'

All I did was try to answer it as there seems to be a great deal of confusion about this.  Even my own accountants don't seem 100% certain and they've been in business for over 120 years.

[discre]

Unless I have missed something, which is entirely possible, one aspect of this that not even eBay seems to have mentioned is the VAT implications.

If a buyer buys from a private seller after 4 February that buyer will have to pay two additional fees on that purchase – a £0.75 fixed fee and a 4% variable fee.  Those fees are either insurance - in which case they'd be subject to IPT - or they are charges.  If they are charges then like all other eBay fees they must either include VAT, or VAT must be added to them.  If the buyer is a VAT registered business they will be able to reclaim that amount of VAT and must be able to identify it.  Indeed eBay will now need to provide the buyer with a VAT invoice for the fees.

If the fees do not include VAT then this is an additional 20% of the fee amount that buyers will have to pay increasing the cost of the item even more.

I'm currently in a long drawn-out email conversation with CS about this but worryingly they don't even appear to understand the concept, never mind the ramifications of this.

One other aspect of the Buyer Protection Racket is the disappearance of the concept of a 99p auction start price for private sellers - such a known draw for buyers that eBay promote the fact.  All auction start prices will now have the £0.75 plus 4% (possibly plus VAT) automatically added (as will any bids) - meaning an instant price hike of up to EIGHTY per cent on low value items.

And eBay think this is going to encourage buyers?  Wow!!!

[dion5feb2016]

I am sure your last sentence is rhetorical, my opinion for what it’s worth, this has been asked time and time again. Absolutely NOT. Your comments were very informative btw, thank you.

[papso22]

The buyer fee is consideration for a taxable supply by ebay to the buyer.  It is subject to VAT but like fees charged to private accounts, it will be inclusive of VAT, so there will not be 20% added, instead ebay will account for 1/6 of it to HMRC.

Buyers are the same as private sellers where the ebay VAT treatment is concerned.

The question that begs is how ebay will provide a VAT invoice to a VAT registered business seller who buys something from a private account.  Issuing VAT invoices to all and sundry is very unlikely to be the default position. 

Interestingly, auctions that start (and finish) at less than 99p will  not be subject to buyer fees.

[discre]

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@papso22 wrote:

The buyer fee is consideration for a taxable supply by ebay to the buyer.  It is subject to VAT but like fees charged to private accounts, it will be inclusive of VAT, so there will not be 20% added, instead ebay will account for 1/6 of it to HMRC.

Interestingly, auctions that start (and finish) at less than 99p will  not be subject to buyer fees.

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Can I just ask where you're getting this information please?

Below is a recent reply I got from CS:

'Regarding Buyer Protection Fees, from February 4th, the price the buyer sees on the listing is the price the buyer pays at Checkout. With auctions, if a private seller lists an item with a starting bid of £1, the buyer will see a minimum starting bid of £1.79 because of the Buyer Protection Fee. The minimum bid amount the buyer sees at each point during the auction will include the fee.'

[papso22]

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@discre wrote:

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@papso22 wrote:

The buyer fee is consideration for a taxable supply by ebay to the buyer.  It is subject to VAT but like fees charged to private accounts, it will be inclusive of VAT, so there will not be 20% added, instead ebay will account for 1/6 of it to HMRC.

Interestingly, auctions that start (and finish) at less than 99p will  not be subject to buyer fees.

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Can I just ask where you're getting this information please?

Below is a recent reply I got from CS:

'Regarding Buyer Protection Fees, from February 4th, the price the buyer sees on the listing is the price the buyer pays at Checkout. With auctions, if a private seller lists an item with a starting bid of £1, the buyer will see a minimum starting bid of £1.79 because of the Buyer Protection Fee. The minimum bid amount the buyer sees at each point during the auction will include the fee.'

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Which bit of information?  I haven't said anything that contradicts your reply from CS.

[bzmotman]

@papso22 wrote

"Interestingly, auctions that start (and finish) at less than 99p will not be subject to buyer fees."

Where is this information available please. Your CS reply did not say this they merely quoted an auction starting at £1 as an example - easier to do the math rather than for 99p.

[papso22]

It was announced on Money Saving Expert and then corroborated by our community manager.

So a private account could start an auction at 1p, have it end at 98p, and no-one pays any fees.

[discre]

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@papso22 wrote:

Which bit of information?  I haven't said anything that contradicts your reply from CS.

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The information that states that:

'It is subject to VAT but like fees charged to private accounts, it will be inclusive of VAT'

and that

'auctions that start (and finish) at less than 99p will not be subject to buyer fees.'

I'm not saying this isn't correct.  I'd just like to know where it is stated so I can read it for myself.