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.

[papso22]

The only time it's worth registering is when the money you are claiming is more than what you are paying!

I would just add the word 'voluntarily' after registering!

[isaa-shaza]

So if I started selling in November 2024 I’d have to wait till this year novemeber 2025 and it will reset?

[rainbowtrax]

No, it doesn't reset. It's calculated over a rolling year. So today, you relevant turnover will be from 4th March 2024 to 3rd March 2025. Tomorrow your relevant turnover will be from 5th March 2024 to 4th March 2025. And so forth. The turnover that the threshold relates to is continually rolling over every day. It never resets, just keeps rolling over each day.

[isaa-shaza]

So basically if I hit 80k in a lifetime I have to become VAT registered?

[isaa-shaza]

There’s my relative who’s hit £90k and was told to add his VAT number, but I’m trying to work out when the £90k sales will reset

[isaa-shaza]

Because I was thinking if I hold my stock till the sales reset then sell again I can avoid the VAT

[rainbowtrax]

No, if at any point, you hit 90k in the previous 365 days then you have to register. It's a rolling calculation where the previous year in exact days is what counts.

[isaa-shaza]

Ah right thank you mate you’re a legend! Only person who’s given me an answer 

[papso22]

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@isaa-shaza wrote:

Because I was thinking if I hold my stock till the sales reset then sell again I can avoid the VAT

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That's perfectly acceptable.  Pausing sales to avoid going over the 90,000 threshold is what a lot of sellers do.  They essentially take a holiday from selling. 

But the sales don't 'reset' as you have already been told.  You have to keep an eye on the rolling total.  It's not like tax years.

[isaa-shaza]

So if i took a break today, id have to wait till 3rd March 2026 right?

[therenewalworkshopltd]

You need to go to the HMRC website, where it explains how VAT works.

Go read this, it explains it all.

And if you still don't understand it, you need to speak to an accountant.

https://www.gov.uk/register-for-vat

[papso22]

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@isaa-shaza wrote:
So if i took a break today, id have to wait till 3rd March 2026 right?

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Are you winding us up now?

[vesetti]

Hi guys, do you know if the £90,000 threshold applies to gross ebay sales or ebay sales after the ebay 13% fee is taken?

[sml192]

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@vesetti wrote:

Hi guys, do you know if the £90,000 threshold applies to gross ebay sales or ebay sales after the ebay 13% fee is taken?

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The VAT threshold relates to turnover so gross eBay sales before any fees or expenses are deducted. 

[therenewalworkshopltd]

And just to clarify that a little further.

If you are charging postage separately, then that is part of the cost.

Also, if you are selling anywhere else, then that must be accounted for as well.

[a45heaven]

Also, if you are selling anywhere else, then that must be accounted for as well.

Which begs the question, why did ebay be involved in securing NI numbers and 'grassing' folks to HMRC - none of the other platforms i sell on have requested what ebay insisted upon -  surely it cant be down to ebay having developed a big heart, unless there were financial inducements maybe?

[jlovie]

For business sellers listing on private accounts who do submit accounts - does it include the new BPF?

[therenewalworkshopltd]

Hmm, I don't think that, that should be clarified for anyone who is breaking the law.

At the very least, they can get off their backside and find out for themselves.

[therenewalworkshopltd]

Really? I've been asked on at least two other platforms.

It is not an Ebay thing at all, but a legal requirement for the sites.

So no doubt they will comply, but probably haven't got around to you yet.

Why wouldn't they?  And why on earth would there be a financial inducement to Ebay from HMRC?

Especially when they don't need to, as this is written into law.

This is not about grassing up to HMRC!  This is about complying with the law.