HMRC exemption certificat for VAT - Sole Trader under £85 000

[wwmeteorites-25]

Hello,

eBay restricted my sale, preventing me to put anything on sale, as they ask me a UK VAT registration number.

That said, I am a sole trader, and my yearly turnover is under £85 000, meaning that I have not to enroll to the VAT program.

I did rise the matter to eBay that, even aknowledging my statement, says that they cant do anything unless I provide a "VAT exemption certificate from HMRC".

Research done, HMRC do not in any case provide such certificate for sole trader under the threshold.

Basically eBay is asking for  a prove I am not VAT registred because I have not to be, and HMRC do not provide such document.

I went full circle with eBay customer service few times, always ending with asking me again me that non-existing document, or say they are escalating the matter with a 48h-72h answer time (meaning being let alone and without further contact with them).

Ebay was provided with my full tax return for the last fiscal year, but not sure they even looked at it, even if it shown my turnover < threshold, black on white.

I am on a Kafka logic loop.

Anyone have been on that situation ?

Thanks

[papso22]

There have been a couple of posts where the eBay rep has told a seller that ALL business sellers need to be VAT registered.   It's a nightmare.

[wwmeteorites-25]

Which is in contradiction with the very email they send, stating black on white that only the businesses above the threshold have to be VAT registred.

The logic would be for ebay then, than on the page where you have to add you VAT number, you have a second selectionable option saying : I hereby declare my turnover is below the mandatory threshold set by HMRC, I do not have to register for VAT.

If you pose a condition on the opening statement using "if", you should offer the two options on the answer you can submit.

Like "IF you are smaller than 4ft you can't go on the ride", then you should be able to have the two options "I am under, you checked, so indeed not going" OR "I am taller, you checked, let me go".

[therenewalworkshopltd]

Personally, I would be asking Ebay to show why they think I am required to be registered for VAT.

Your only option to do this, if you can't get anywhere with first level support, is to escalate the issue.

Ask to speak to a manager.

Otherwise, there simply is no way to prove that your not required to.

Other than perhaps sending them a copy of your up to date accounts.

Obviously, there is always the option of actually registering.  Which depending on how things work for you, could actually be beneficial, though likely not.  But it's not actually as onorous as you might believe.

[vwgolfman333]

Can you sell anything that's listed as I can't ?

it even says in the eBay message I got about the restriction it says at the bottom I can't even sell anything 

[vwgolfman333]

When I spoke to eBay they actually agreed I don't meet the threshold for vat requirement and now asking for a letter which doesn't exist, you either meet the requirement or you don't, no reason for a letter but that's what they want now, so basically they not telling me to get vat registered but provide a exception letter which HMRC will never issue as it doesn't exist and there's no reason to issue one 

[technthread]

Is it possible that they are adding up the total value of your active listings and deciding that if everything sold today then it will take you over the VAT threshold?

Or do you have more than 1 eBay account, even a private account and they are combining the current or projected totals?

[wwmeteorites-25]

I have only one account, and sent to them both my Sales and Performances report (three ones : last completed fiscal year, civil year, and last 12 months to the date they sent the request first; none close to the threshold).

I did send them as well my full tax return, and tax abstract that shows my turnover.

Odd as well their email is not even updated to the current £90 000 threshold, and still use the old £85 000 figure.

For me it's pure dadaism. Like asking a 8yo kid to show a driving license, and if (s)he answer (s)he dont have any because, you know, 8yo, and showing an ID, still being asking for a "driving license exemption certificate from DVLA".

[technthread]

That confused me too as I thought it was £90k. 

I could understand it if active listings plus solds exceeded £90k as technically that could be reached instantly if a shop was cleared out and it puts eBay in a position they can't legally be in. 

In your case their algorithm must be going off a projection. I have no idea how you resolve it other than writing to head office, normal customer services are a waste of time for things like this.

[vwgolfman333]

No they can't add your listed items, it clearly says they can't, if they could then most people would meet the vat requirement. 
As of April this year it's actually £90k but my sales are not even 50% of that.

Do you know how to write to head office as I don't know a address ?

This is not the first time eBay requested this from sellers, there's posts on here and on other places regarding this vat exception letter but I don't understand how they can first ask me to get Vat registered then when I challenge it ask for a letter which they must know by now there's no such thing as a letter. You either meet the threshold or not it's as simple as that. 

[vwgolfman333]

Can a eBay staff member comment on this as I noticed they do sometimes ?

[technthread]

dave@ebay marco@ebay 

Hopefully those tags work, I haven't done it before. 

There is a head office in Richmond which comes up with a Google search but someone else may be able to confirm if that's the right place to send a letter to. 

[therenewalworkshopltd]

The company registered office is:

1 More London Place, London, United Kingdom, SE1 2AF

Whether or not that is the right place to communicate with them, I don't know.

But they should receive correspondence there regardless.

[magpiecorner1]

I think the crux of the problem is that there is a world of difference between being VAT exempt and being under the threshold of £90k that would require VAT registration.

So you and eBay might be talking at cross purposes.

I don't know the parameters that eBay uses to determine whether or not to flag an unregistered business account, but from the many discussions on the boards over the years, I'd conclude it's not a simple calculation that you've gone over.  I'd imagine that, as eBay works on a 90 day window, if you have a 90 day total of sales that might extrapolate to heading towards the threshold, that may be the trigger.  We don't know though.

So I think eBay is not asking you to prove that you have traded under the threshold, but instead are asking for proof that your goods are exempt or zero rated supplies.

Thing to do is write to HMRC, and ask them if you need to register.  Send details of all sales, plus shipping costs, worldwide.  International sales are not normally VAT applicable, but they might be included when calculating threshold figures.

Could be worth a trip to Edinburgh to make an appointment with someone in the regional office, with the objective of getting something in writing.

Or find out if either there is a VAT office in Aberdeen or even worth trying the Council, looks like your council has a bigger remit than most.

If you want to phone HMRC or eBay, try SAY NOT TO 08 70.  Amazing what you can find on there!

[ile136yz]

See Gov.com for VAT Registration No. & De-Registration.

Contact them saying you are under the £90,000 threshold, but eBay are asking for VAT No.  Do not use the word exemption as this may apply in this instance to an already VAT Registered person.

[vwgolfman333]

It seems to me they done some checks around 30 days ago and I presume it was just before the tax year, maybe they check accounts before the tax year, email I got clearly said I need to be vat registered as I meet the requirement for that which is impossible, even if we calculate it last 90 days and multiply that by 4 then it's still not even 50% of the £90k requirement, when I spoke to them it was clear that u need to ask HMRC for vat exception letter whatever that is. I can't see then asking for if the goods are VAT excempt as they didn't say that and if that was true then they would be asking a lot of people for that. This is not the first time they've asked people for this but don't really know how or if they got it resolved 

[vwgolfman333]

Problem is the email says get a vat number but eBay themselves say yes you are below the threshold but get vat excemption letter. EBay is making no sense so don't really know what to ask HMRC 

[ile136yz]

You need to speak to a person in gov.com as with everything changes are made all the time.

I read a while ago that a person/Business can register for VAT & then de-register (this is how the correct exemption VAT number is generated/changed. I know it seems mad & that is why I suggested speaking to a person as it is better to get an up to date solution when dealing with a tax problem (you can ask them to send a copy of your discussion for your records).

[myriad*seller]

VAT registration might not just be about turnover

If eBay believe you are outside the Uk, or are listing items based outside the Uk then you would also have to be VAT registered.

I think eBay seek VAT reg if sales from one month exceed £90k divided by 12 too (£7,500), not just on a 12 month rolling basis. 

[magpiecorner1]

If they are asking for an exemption certificate they are asking for verification that your goods are exempt from VAT.

That might not be the information they actually want, because they might not even know even the difference between VAT exemption and VAT registration, because what they appear to need is some document saying that you are trading below the threshold.  A document which doesn't exist because it could only exist if you put in accredited accounts on a monthly basis.  That is because a business can be under the threshold one month and over the next.  Anyway, I think a VAT exemption certificate would only be given to someone who is VAT registered.

My theory is that eBay will trigger well before the threshold, because they have absolutely no idea, from your turnover with them, that you are trading under the threshold.  Only you know if you sell elsewhere.  EBay, though, has a responsibility to monitor sales and they are using a hammer to crack a nut.  

You might be on a hiding to nothing trying to either figure out why you are in this position, or  how you can provide something that can't exist.

So the best thing to do is check the last three months, and then check the last six months.  Even check a three months section and go back one month and check that one.  So Jan - March 2024, Dec - Feb 2024 and so on.

If a month, or a 3 month period, has a blip that, if extrapolatedcto 12 months and it's higher than average,  you might find a reason. 

No matter, work it all out and put together a case, send it to head office, but phone first and ask who it can be sent to and if you can email it  (as well) .  That call might save you the work - because otherwise you will have to register (you don't need to be over the limit to register), deregister the following month, and you will have confirmation of deregistering.  And that might do.  Who knows?

But phone them!

[magpiecorner1]

When you de-register for VAT, I've done it twice, you get a formal letter stating the date you de-registered.  At least you used to - but that's not what is being ask for.