VAT Registration - Sole Trader - UK and EU Taxes

[style_italia]

Hi All,

I had an interesting chat with eBay customer service as I wanted to duble check regulations around VAT and taxes since I recently registered as sole trader and therefore changed my account to business. eBay customer service is saying:

- eBay will collect the VAT on your sales and will pass it to HMRC.

- As Business seller registered in eBay UK, you need to registered for VAT. It is mandatory for every business sellers to be VAT registered.

Quick info: I am registered in UK and my items to sell are in UK. I sell only fashion items (clothes, shoes, accessories).

What I would like to understand and confirm is really:

1. why eBay pretend me to be VAT registered to sell on eBay if HMRC says I do not need to - if my taxable turnover do not exceeds the threshold of £85,000? Can I use the platform even if I do not want to comply?

2. does eBay collect VAT on my behalf even when I sell outside of UK? What confuses me is the option in the pricing section saying 'VAT (optional)'. As I am not VAT registered I can't collect any VAT I assume...

3. if I want to sell from UK into EU through eBay's international shipping program, can I do that even if I am not VAT registered and does eBay still collect VAT and taxes on my behalf as they would do when I sell in UK?

I can't really find many answers online. So to recap I would like confirmation that from a VAT/TAX POV I am safe in selling into UK and if I can do that as well for EU while not being VAT registered as I will stay below the 85k threshold.

Thanks.

[moldosgifts]

If you live abroad you have to be registered for vat if you sell in the uk.

The threshold does not come into it.

[style_italia]

Hi! I do live in UK!

[moldosgifts]

In that case you do not need to register for vat until you turnover get close to the threshold.

Tell the CS to jog on in a polite manner of course.

CS agents do not always give the best advice,

Vat is for total tuenover no matter where it is earned not just ebay.

[moldosgifts]

Ill add i am a business seller not registered for vat i dont need to as sales not reached anywhere near the threshold.

[sml192 · Accepted solution]

For sales within the UK you do not need to be registered for VAT until you reach the threshold (currently £90,000) so no idea why you have been told otherwise.

For sales to the EU you do not need to be registered for VAT unless you have stock stored in the destination country or are selling direct to consumers in that country rather than via a marketplace.  If either of those did apply then you may need to register for VAT in the relevant country, not the UK. 

Ebay will collect VAT on EU sales, at the relevant rate for the country in question, for orders up to 150 euros.  For orders above 150 euros VAT will be collected on importation by the carrier.

Selling through eBay's Global Shipping Program makes no difference to your VAT obligations. 

https://www.ebay.co.uk/help/selling/selling/vat-obligations-uk-eu?id=4650&st=3&pos=4&query=Your%20VA...

[a45heaven]

I think youll get better , reliable advice from these boards and Mentors.

CS , unless Ireland, is not consistant to say the least.

[style_italia]

Thank you all for clearing up my doubts within just a few hours and responses - I’m truly amazed!

To clarify, I only intend to sell through a platform, whether to UK or EU buyers (and yes, all the stock is located in the UK). Regardless of the buyer’s location, I should also use the VAT-inclusive pricing.

To recap: as long as my total sales don’t exceed £85,000–£90,000, I can safely sell to both British and European customers via eBay. The only requirement is to keep invoices and receipts for the end-of-year self-assessment. Is this correct?

Also, there is any way I can showcase a slight different price on the listing, to UK/EU buyers? I would like to adjust the EU one for the extra international fees that eBay UK charge?

Thanks!

[moldosgifts]

 I should also use the VAT-inclusive pricing

Yes but maybe not the reason you think, As a none vat registered buiness you are not allowed to charge customers vat. But you will pay vat to sellers who are vat registered such as ebay that charge cat on your fees.

as long as my total sales don’t exceed £85,000–£90,000

Yes as long as you only sell on ebay if you sell elswhere thye will need to be added to your total sales.

Also, there is any way I can showcase a slight different price on the listing, to UK/EU buyers?

Should'n't need to as prices are shown in your local currancy so $ in the us an E in europe.

[sml192]

If you are not VAT registered then the price you charge does not contain any VAT.  EU buyers will be charged VAT on top of the price you charge. 

You cannot charge EU buyers a different price for the item so you would need to incorporate the extra international fees into the postage charge.

Yes you will need to keep invoices/receipts for the end of year self assessment. 

[style_italia]

Thanks a lot guys! Way more confident now in using eBay as a platform to sell with a business account! Been holding back for a couple of months while I tried to clear these doubts! Much much appreciated! 

[sml192]

You're welcome and good luck with your selling. 

[blofieldbooks]

By law, you only need to register for VAT if you are selling over 90k a year. As a new seller, you probably won't hit anywhere near that, which means no need to send in quarterly financial records to the HMRC, and just submit an end of year after 6th April. If  you are selling a lot, expensive items, or if you have an anchor shop (as I do) it's worth being registered, as the VAT you receive back makes it worthwhile (esp with the anchor shop being over £500 a month, before you sell anything). 

[style_italia]

Thanks a lot! I will definitely explore that option but first I would like to reach at least 50-100 sales - before jumping into VAT adding another level of complexity and expenses because of the accountant! 

[style_italia]

Hi All,

I do have another question and pretty sure I can find an answer quite quickly here!

As probably many other's the eBay shop is a side hustle... I do have a normal 9-5 job as employee (I do believe this is classified as PAYE employment aka a normal job?). Does my annual salary (before or after tax) count towards the 85-90k threshold for VAT? Also, another detail I wanted to check is - the total revenue (not the gross or net profits) is the figure that count towards the threshold. Is that correct?

Thanks!

[sml192]

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@style_italia wrote:

As probably many other's the eBay shop is a side hustle... I do have a normal 9-5 job as employee (I do believe this is classified as PAYE employment aka a normal job?). Does my annual salary (before or after tax) count towards the 85-90k threshold for VAT?

Your salary doesn't count towards the VAT threshold.  VAT relates solely to the business and not your personal earnings.

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@style_italia wrote:

Also, another detail I wanted to check is - the total revenue (not the gross or net profits) is the figure that count towards the threshold. Is that correct? 

The VAT threshold relates to turnover not profit. 

[style_italia]

Great thanks a lot! All clear now.

[myriad*seller]

Don't forget, as you already have a PAYE job, you will be taxed (income tax and NI plus student loan repayments if you have one) on all of the profits you make, as you have used up your tax allowance with your wages. 

[lux.parfum.shop]

Good day everyone!😊 I am sincerely glad that I found this topic, because I also have many questions and I hope for your help. I am a private seller, and my annual turnover does not reach even about 90,000 £. Now eBay is collecting information and submitting reports to HMRC regarding reporting for 2024 Tax year. What are the consequences after sending the report? Does this report mean that I need to switch to a business account and register a VAT number? What will happen after this report? Should I expect a letter from eBay? With respect.

[game_raid]

You need to switch to a business account now and not wait for eBay to tell you, you're a business not a private seller.

I take it you're registered for self assessment?