Ebay forces upgrade to Business due to new HMRC regulations

[sportex-uk]

Hi All.

I've received an email from ebay forcing me to switch to business account due to the volume of my recent sales. Customer service explained that I exceeded £1800 in one month, so they act in line with new HMRC regulations. The email is a bit threatening: "We need you to make these changes to your account within the next 21 days. If you don’t, your selling privileges may be blocked. This includes listings ended and loss of selling history."

However, As I'm not ready to go business and I consider my increased activity as temporary, Customer Service advised that if reduce my sales volume, I can stay private. Has any of you passed through this process?

Also, what happensto your existing promo listings if you switch to business? Are they allowed to continue on promo terms and with 'no returns accepted' until they sell or end?

[myriad*seller]

See OP and the other threads on the boards now where the sellers  say they has been forced to change to a business  account by eBay as soon as they exceeded £1700 this month

I think a change is afoot finally, now eBay/HMRC have set a limit (£1700 in sales in a month) 

Don't forget, there are shareholders putting pressure on eBay to increase profits. Forcing business registration onto sellers will increase fees, and profits, so eBay have a real incentive to do this for profit reasons too...

[btr.style]

The thing is though, HMRC as you say care about money. 

On the news earlier there was a thing of them going after people for tax after they lost their money to pension investment scams. 

Who is more likely to be upfront and honest? A business account or private? 

They have started doing this because of many sellers having a 'side hussle' and not fulfilling their tax obligations. Said people will likely be on a private account (as a business account is basically accepting making profits and knowingly declaring), with some not realising (thus still on a private account) and some trying to fiddle the system. 

You would imagine if this HMRC activity is about side hussles, eBay would comply with pushing those onto business accounts who should be, to increase the likelihood of them doing self assessments off their own back, and so no comebacks for them for not doing enough. 

[myriad*seller]

Exactly

eBay cannot be seen to be condoning/allowing illegal trading after sellers have hit the limit, and don't forget, this notifies the system that eBay have been missing out on fees! 

They can easily automate the registration process, eg as soon as the limit is reached the trigger for notifying HMRC goes off and the business registration can be triggered at the same time, as it seems to be judging by the OPs who have come to the boards saying "I made more than £1700 this month and eBay have written to me saying I have to register as a business due to new HMRC regulations".

OP did not make this up, it is what was said in the email they received! 

[sportex-uk]

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@howmuchtobid wrote:

radek.esq,

In your own words why do you still have literally hundreds of blank listings ?

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It's not your business really.

[myriad*seller]

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@sportex-uk wrote:

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@howmuchtobid wrote:

radek.esq,

In your own words why do you still have literally hundreds of blank listings ?

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It's not your business really.

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Because those were placed when OP was a private seller, and so attract only private seller fees... 

OP has lots of blank listings to take advantage of private seller fee offers...

[sportex-uk]

Here you have below, they told me over the phone it's with relation to HMRC and £1800.

I had an impression they won't do anything, or will at least send second warning and now I'm pretty certain that's the case. There is a private seller from my area, who is trading professionally for over a year (ooking at their feedback) and with either similar, or higher turnover. This email was sent on 1 January and they are still trading on a private, so I believe they just ignored it.

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We regularly review the eBay trading activities of our top sellers, and we wanted to let you know that you need to upgrade your account from a private account to a business account.

Upgrading your account is simple and should only take a few minutes.

Here's how:
1. Log in to My eBay.
2. Click on "Personal Information" under the "Account" section of My eBay.
3. Click "Edit" alongside the Account Type in the "Username and Password Information" section. (You may be asked to sign in.)
4. Select "Business Account" and click "Submit" to upgrade your account.

We need you to make these changes to your account within the next 21 days. If you don’t, your selling privileges may be blocked. This includes listings ended and loss of selling history.

Here are some of the many benefits of a business account:
- You can register with a company name. Your company name will be displayed in all communication with the buyer, such as invoices and emails..
- You may be eligible for a discount on eBay fees. If you have a shop, you may save money with free insertion fees.
- You can display contact details as well as terms and conditions in your listings.
- You have access to high volume selling tools, like File Exchange.
- You can use the basic shop or the larger shop subscriptions.
- You can leverage eBay selling tools to promote your listings, increase basket size, and build brand awareness.

For more details on becoming a business, please visit our eBay seller centre:
https://sellercentre.ebay.co.uk/

We appreciate your cooperation and look forward to partnering with you in the future.

Thanks,

eBay

[sportex-uk]

It's only about insertion fees and for the first month only, as I'm not going to let them to renew for 30p anyway. Private seller fees without FVF are actually higher than business, so I'm probably not gaining anything, to all commentators' relief.

[kempseykate]

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@btr.style wrote:

Who is more likely to be upfront and honest? A business account or private? 

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I hope you meant that to be:

"Who is more likely to be upfront and honest? A business account or a business registered as private? 

I have been a business seller on here - I was honest.

I am now a private seller only on here - I am honest.

There are plenty of honest private sellers - and plenty of dishonest business sellers.

[kempseykate]

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@myriad*seller wrote:

Exactly

eBay cannot be seen to be condoning/allowing illegal trading after sellers have hit the limit, and don't forget, this notifies the system that eBay have been missing out on fees! 

They can easily automate the registration process, eg as soon as the limit is reached the trigger for notifying HMRC goes off and the business registration can be triggered at the same time, as it seems to be judging by the OPs who have come to the boards saying "I made more than £1700 this month and eBay have written to me saying I have to register as a business due to new HMRC regulations".

OP did not make this up, it is what was said in the email they received! 

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In the only case I have seen (the one on this thread) the email just told them to upgrade. It was CS who said it was because they had £1,800 sales in one month. And we all know how reliable CS are. Ebay have always said they will not divulge the 'limit' because of sellers gaming the system.

[btr.style]

Repeatedly you've chosen what I have put and just speak nonsense instead. 

Business fees are plus VAT. So whatever the fee is +20%

Private fees with/without promo don't have VAT added on so the fees are always much less, 20% less, regardless of what the base fee is. 

I.e if it was 12% for business sellers and 13% for private. For a £100 sale on private it would be £13. Business would be £12 plus 20% VAT so £14.40 fees to pay. 

[myriad*seller]

Thank you

What will happen is that eBay will block you withdrawing any sales funds until you do register

They will allow your listings to make sales, but you wont be able to withdraw any funds from sales until you (they) register 

They can (and do) hold funds indefinitely until you comply 

[sportex-uk]

VAT is applicable to all fees for both, private and business sellers.

[myriad*seller]

Private seller fees include VAT

Business seller fees have VAT added 

[howmuchtobid]

radek.esq,

As a legitimate business seller you will have to pay nearly £150 a month in insertion fees for the listings you currently have as you do not have a shop.

What do you think of that ?

[btr.style]

Wrong person to quote. That's what I said. 

@sportex-uk 

Not the case at all.  You'll soon find out. Go and look at your sales now since business account switch. You'll see eBay have added VAT to fees. 

The definition of VAT is when a business earns over 85k a year, they have to be VAT registered. They then in theory should add 20% to their prices which then is paid to HMRC. 

eBay are subject to this 20% VAT charge. For private accounts they don't add it on. For business accounts they do. 

No point arguing the fact. You will now be paying +20% on your fees. Plus if you have any sense will start a shop subscription to get 250 listings for free each month. 

Anyway, I'm out. No point contributing to a know it all who will just have some comeback each time for the sake of it. 

[ukhaberdashery]

You generally don't add 20% to your prices just because you become VAT registered.

If you are VAT registered you then claim the VAT back every quarter on purchases (which you cant do if not registered) although  if you do the calculation in order to maintain the same profit as before you would need to sell for 13% more (When I became registered my accountant went over this) but different scenario may yield different numbers. Since adding 13% would make a lot of items more expensive you don't do it and just take the hit in less profits. That's why a lot of people stay out of VAT by not going over the limit as overall it make you worse off. There are are benefits to some people ie selling to other VAT people/businesses as you are cheaper as they can get the money refunded by HMRC eg shoes £120 private, buyer pays £120. Buyer is a VAT business £120- VAT =£100

But as you say above people will be paying VAT that they cant claim back.

[myriad*seller]

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@btr.style wrote:

Wrong person to quote. That's what I said. 

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Oops sorry, replied to the wrong post 😐

[sportex-uk]

I had VAT added to fees on a private account already, see attached. Is it anything different on BA?

[sportex-uk]

I don't need more than 100 listings per month due to my activity scale. This equals to £30 in insertion fees and matches monthly subscription to the basic shop with 250 included listings.

My items usually sell within 1-2 months, so additional £0.60 per item +£0.33 per item towards 'returns', so it makes additional £1 which I already included in my calculations above (£70 -> £78).

[john8150_0]

This thread has been great fun but it's already cost me 3 bags of popcorn.