VAT Restriction Despite Being Under the 85k Threshold?

[vene_laur]

Hi,

Just wondering if anyone else has come across this problem? Is it some kind of error? Despite being under the threshold by 11k, eBay have still decided to restrict my account. Customer service have esculated the problem to the account team, but just wanted to know if anyone else had experienced the same thing?

Kind regards

[katie@ebay]

Hi all,

Thank you for your posts here.

We read through this thread and spoke to experts internally to get some information for you.

Here are some points that we wanted to clarify on this topic:

• VAT threshold in the UK is £85,000 in a rolling 12 months. The rolling 12 months is important to point out as it is not based off a tax year.
• We take into account turnover for this £85,000 threshold and we do not take listed stock on the site into our calculations.
• Postage costs are included in this calculation as it is based off complete turnover.
• In regard to the Global Shipping Programme we calculate the turnover received by the seller. Therefore, the international leg of the shipping costs is not included as turnover.
• For a cancellation, if a refund is issued to a buyer this amount is no longer considered as turnover and would not contribute to the £85,000 limit.
• International sellers who list items that are located within the UK, do not have to hit the £85,000 limit. They are required to be VAT registered as soon as they have at least 1 listing located in the UK, even if it doesn’t sell.

I hope this helps to clarify some common confusion we see here on the boards.

Many thanks,
Katie

[ldvintagegems]

Hi there 

I've just had the same happen to me... and wondered what happened in your case? Did it get resolved... my whole livlihood has gone down the pan in one fail swoop! I also don't feel I'm over the threshold but have had no choice but to apply for a VAT number as dealing with eBay is just like talking to a robot 'computer says no' kind of scenario.... 

I'd really appreciate if you could reach out to me with your story and any advice you may have... ldunmore85@gmail.com 

many thanks 

[papso22]

You might not 'feel' you are over the threshold, but have you checked using the criteria in the eBay rep's post above yours?

[ldvintagegems]

Yes I’ve checked the criteria and done the calculations and I’m under according to mine and over according to ebays - I think there’s certainly some confusion around the accuracy of ebays figures…

I was more looking at advice into how long the application takes and whether anyone has heard back from HMRC with a tax exemption certificate?

Another confusing factor is that antiques are meant to be exempt from VAT and they make up a large proportion of my sales.

Thank you

Sent from my iPhone

[watchfan700uk]

I have been  registered for a few years and my monthly turnover is now less than £7000 PM which means I will be under the threshold. However - I will not be deregistering until - the total outputs value as submitted on my last 4 returns is under £85K and my rolling ebay turnover is also under this figure. The way things are going that will not be long!

I have heard from some sellers who deregistered and had their accounts limited or blocked or even deleted by ebay and hope this will not be the case for me.

[sheba-knows-best]

Hi.

This may not help - and I do understand what you are saying regarding antiques being exempt - I'm just checking you know where to access ebay's sales figures for yourself?

It is: seller hub / performance tab / sales - then custom the dates 5/8/22 to 4/8/23 (365 days). I watch this on a daily basis and compare with my own data (on Excel). Despite running just below 80k all year, ebay and I rarely differ by more than £200 so I think ebay's data is correct (probably more correct than mine, as mine is manually input).

[papso22]

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@ldvintagegems wrote:
Yes I’ve checked the criteria and done the calculations and I’m under according to mine and over according to ebays - I think there’s certainly some confusion around the accuracy of ebays figures…

I was more looking at advice into how long the application takes and whether anyone has heard back from HMRC with a tax exemption certificate?

Another confusing factor is that antiques are meant to be exempt from VAT and they make up a large proportion of my sales.

Thank you

Sent from my iPhone

---

It's interesting that eBay's figures differ ftom yours if they are based on the same thing.  I suspect that eBay adds a safety margin uplift that means they want you to register when you are close to the threshold given that they are legally responsible for the VAT if you should be, but are not, registered. 

Reports say it's taking several months to get a VAT number. 

I don't believe HMRC issues a VAT exemption certificate, even if eBay thinks they do.

Antiques are not exempt from VAT although there are special schemes for how you can account for VAT on them. Your sales of antiques are part of your turnover for VAT registration purposes.

[the_bald_orc]

Sorry for the thread hijack, I'm currently sat at £65k for the rolling year but my sales are increasing month on month, (averaging £7.5k a month now) so it won't be long before I have to look at the dreaded VAT.

I have very limited knowledge concerning the basics of VAT, would it be worthwhile employing the services of an accountant to hold my hand through it?! 😄

[ile136yz]

You can always enquire with an Accountant & also contact your local VAT office for their for advice, then you can decide the best way forward.

[sheba-knows-best]

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@the_bald_orc wrote:

Sorry for the thread hijack, I'm currently sat at £65k for the rolling year but my sales are increasing month on month, (averaging £7.5k a month now) so it won't be long before I have to look at the dreaded VAT.

I have very limited knowledge concerning the basics of VAT, would it be worthwhile employing the services of an accountant to hold my hand through it?! 😄

---

Hey! Well done you showing growth in these tough times! 

Just fyi my accountant warned me to tread carefully before going over the VAT threshold as it is a pain the ****.  Some people want to grow their businesses endlessly of course - respect to that - but it doesn't work for everyone . So yes, I might talk to an accountant first if I were you.

 I would urge you to sit down (with or without an accountant) and work out quite how much more than 85k a year (with VAT) you will have to sell to just break even with what you would have made had you kept below 85K. It's not simple to deregister (and convince ebay you have deregistered) from what I can make out from other threads on this matter. I know watchfan always gives good advice on this matter. I know when I worked out my time commitments and preference for not managing others, it's made sense for me to focus on increasing profits not sales. 

@watchfan700uk 

[ldvintagegems]

Hi, yes I’ve already done that and was no joy… accountant just tells me I’m not over the threshold and doesn’t understand what’s going on either! Tax office don’t care about little sellers like me on eBay…. 😞

Sent from my iPhone

[the_bald_orc]

Thank you very much for your advice, I'm definitely going to do a lot of my own research but I do think I also want to speak with a professional. I do want to grow as much as I can but I appreciate that interim period of registering and then trying to bring the sales in to make it worthwhile could be a challenge.

As an aside, I enjoy reading your posts on here. The forum tends to be quite negative but your posts are a good counter to that.

[sheba-knows-best]

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@ldvintagegems wrote:

Sent from my iPhone

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I hope I'm not hammering home a point that you already have covered. But have you actually checked: seller hub / performance tab / sales - then custom the dates to give 365 days? This will give you what ebay considered to be your 365 day rolling sales. 

If this shows over 85k then really, I think you're own figures may be wrong. Ebay tends to be accurate. If these figures show below 85k then you have a very strong hand to put before ebay.

[papso22]

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@sheba-knows-best wrote:

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@ldvintagegems wrote:

Sent from my iPhone

---

I hope I'm not hammering home a point that you already have covered. But have you actually checked: seller hub / performance tab / sales - then custom the dates to give 365 days? This will give you what ebay considered to be your 365 day rolling sales. 

If this shows over 85k then really, I think you're own figures may be wrong. Ebay tends to be accurate. If these figures show below 85k then you have a very strong hand to put before ebay.

---

I wonder if this is the issue?  The law is a rolling 12 calendar months but eBay uses 365 days?  

[watchfan700uk]

I just checked by rolling 12 month total and it is £84K

I wonder what would happen if I delete my vat number from my account.

I can always display it in my item description as per legal requirements.

This might be a good way to test what ebay will do in this case.

[sheba-knows-best]

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@papso22 wrote:

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@sheba-knows-best wrote:

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@ldvintagegems wrote:

Sent from my iPhone

---

I hope I'm not hammering home a point that you already have covered. But have you actually checked: seller hub / performance tab / sales - then custom the dates to give 365 days? This will give you what ebay considered to be your 365 day rolling sales. 

If this shows over 85k then really, I think you're own figures may be wrong. Ebay tends to be accurate. If these figures show below 85k then you have a very strong hand to put before ebay.

---

I wonder if this is the issue?  The law is a rolling 12 calendar months but eBay uses 365 days?  

---

Isn't 12 calendar months, 365 days? What am I missing?

[sheba-knows-best]

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@watchfan700uk wrote:

I just checked by rolling 12 month total and it is £84K

I wonder what would happen if I delete my vat number from my account.

I can always display it in my item description as per legal requirements.

This might be a good way to test what ebay will do in this case.

---

Blimey, you're brave! Seriously, I would tread carefully. You just never know what might happen. The problem with ebay, "computers says no" and it takes monumental effort and persistence (and a tad of luck) to get a real, live human to sort it out for you.

[watchfan700uk]

no I won't be doing that.

I will eventually dregister and then take my chances.

[wh_laptops]

I'm in the same boat to, I was under 65k & asked to register for VAT. Tried explain to ebay, but they weren't having any of it. now is it possbile ebay are looking at sales from 1st Jan to 31st Dec??. if so, then my turnover was 86.5k

[rainbowtrax]

If your turnover was 86.5k from 1st Jan to 31st Dec then surely, at that time, you should have become VAT registered as your rolling year turnover on 31st Dec was above the threshold?