VAT Threshold increase question

[btr.style]

So it seems the VAT registration threshold is now 90k. 

Does this now mean that it's 90k over the last 12 months (including the months when it was 85k) or is it something that will only be beneficial next April when sales in the prior 12 months is when the limit was upped to 90k. 

If it's the former, have eBay's systems updated so if you now exceed 85k (but under 90k), it doesn't ask for a VAT number to carry on selling? 

[therenewalworkshopltd]

The whole point of my post, was that you CANNOT claim 4 years VAT back!

You made it seem a lot more good to do, than it actually is.

The rest is just being pedantic, in choosing individual items and specific circumstances.

And again, I did not say that you cannot claim all the fees back on the intial claim, but that you could be on dodgy ground and to actually check with an accountant!

[papso22]

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@typo_lee wrote:

Bit patronising somewhat? I have loads of machinery as thats the nature of what we sell on all marketplace platforms and its very expensive so well worth the VAT reclaim.

Regarding seller fees and claiming VAT back this was lifted straight off Google:

'Paying VAT on eBay seller fees However, when your business is VAT registered you can claim back the VAT that you pay on your eBay fees. Find out more about reclaiming VAT here.'

So the advice your giving out is totally incorrect.

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My take is that you can claim the VAT back on ebay fees that you incur on  sales made post registration and where you have accounted for VAT on the associated sale, but I think you are on dodgy ground claiming the VAT on the fees for sales prior to registration where no VAT was accounted for on the sale.     I think these services count as an exception.

The 6 month services rule is meant to cover setting up costs incurred prior to being VAT registered.

[arkwebus]

At the end of each month you look back for the past year and if the turnover [including postage] exceeds the relevant level at the end of that month you have to "notify" HMRC within 30 days.

There is a provision that they may not register you if - for some odd reason - you exceeded the limit but "can convince them" that you will not do so in future [!!].

@btr.style 

[jow1995]

Good question, hopefully ebay will clarify.

[papso22]

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@jow1995 wrote:

Good question, hopefully ebay will clarify.

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I doubt it!

[dave@ebay]

Hi All,

This has been updated and came into effect from 1st of April.

We are currently updating all our systems and emails etc to reflect this change.

Thanks,

Dave

[81naut_51]

Thanks Dave (dave@ebay)!

Can you also confirm whether or not eBay subtract foreign sales tax collected by eBay (when you sell to overseas customers - USA/Aus/Norway etc) from the Totals Sales figure when determining overall rolling 12-month Turnover? For example when checking the "Sales" via the Performance tab:

Total sales = £83000 (Includes item price, postage and packaging paid by buyers to you, and taxes and government fees such as recycling fees collected by you or eBay. )

If you remove all the Tax collected by eBay then total sales = £80000 

Hmrc would use £80000 as the figure, would eBay also use this figure to determine? More a question for those who export extensively via own couriers (not GSP) and are close to the threshold, whether they have to stop at say £86000 rather than £90000.

Kind regards

[dave@ebay]

Hi @81naut_51 

Ive asked for clarification on this, Ill come back to you when I have an answer.

Thanks,

Dave

[81naut_51]

Thanks dave@ebay!

The attached image provides a more visual example for others who do not quite understand what I am describing:

It shows part of "sales" page from the performance tab and below it the Order details from that particular sale

Sale: £206.99 + £35 Postage = £241.99

Buyer from USA pays: £206.99 + £35 + £19.97 (Sales tax) = £261.96

I receive £241.99 (as expected). However, in Total Sales under the performance tab it will show £261.96.

My question is whether eBay use the figure £241.99 or £261.96 when determining turnover. As using the latter will inflate the turnover more than it is.

[dave@ebay]

Hi @81naut_51,

We align to HMRC for UK sales regardless of where an item is posted. For UK sellers its the UK revenue they owe tax on. 

For more information on this you will need to speak to a tax advisor.

Thanks,

Dave

[papso22]

Sorry Dave that's as clear as mud.

Why can't you just say whether it's £241 or £261 that ebay uses?

Also you have been tagged in a thread where ebay CS told a seller that ebay requires all business sellers regardless of turnover,  to register for VAT; that seller, who is well under the VAT registration threshold, has now had his account suspended.  Can you explain that?

[tommystrezures]

That was a politicians answer to a question, in the fact they haven't actually answered the question! I know the answer to this question but lets see if Dave or Ebay will confirm it.

[dave@ebay]

Hi @papso22 

I cant give any any advice on VAT matters but there are currently updates being made to our online resources and emails etc which should help. With these matters though, it is always better to speak to a tax advisor because they will be better able to to explain what is being charged.

As you know, I cant comment on a conversation that happened with a CS advisor. I don't know what was said on the call or for what reason the account was suspended, it could have been for any number of reasons. 

Thanks,

Dave

[tommystrezures]

Dave, we are not asking for advice on VAT matters, but it would be helpful to know or rather it would be useful to know what figure ebay base use for basing information eg £241 or £261 for determining turnover. 

Yes we should consult with an accountant etc for further advice but its not actually possible to discuss it when ebay are being so damn cloak and dagger about the matter and not answering a very simple question.

So what figure does ebay base turnover on as per post 29? Is it £241 or £261?

[papso22]

Hi dave@ebay 

How eBay works out turnover for when it tells traders to they should register is not 'advice on VAT matters', it is part of eBay's programming.  We have seen many instances where sellers are told they have to register when they clearly don't, the programming is clearly wrong.

HMRC makes no secret of what turnover is, eBay says it follows HMRC rules but we have seen examples when it is clear there is something else in the algorithm. 

Confirming whether it's £241 or £261, is simply a practical example of whether eBay follows HMRC or not.  They say they do, but your response does not make that clear at all.

I understand that you simply repeated what you were told, but ebay are being deliberately obtuse on a matter of significant importance.  

As for the other post you were tagged in, perhaps you could assist the seller off the boards.   He has the CS reps incorrect comments in a transcript.

[81naut_51]

Hello dave@ebay,

A tax advisor would know what the figure SHOULD BE, but not what figure ebay IS USING to determine turnover. How would they? They are not privvy to ebays programming and data collection.

A clear answer cannot be that difficult to find out (from above). It would be very important and useful information for anyone who exports. Especially as the difference in turnover is ~8% between the figures- which is a lot... 

Thanks

[papso22]

Exactly, a tax advisor would say:

"According to the law as set out in the VAT Act 1994, you are nowhere near the VAT registration threshold and I have no idea why eBay is telling you to register, or else.  Here is my bill".

[twofourdeltasurplus]

Well I have dropped below the threshold, deregistered date end of march, My "great" acocuntant told me today, so popped into account and removed the VAT number.

Not long after, the nice message saying I MUST add it back or be restricted as my turrnover is over 85K, they still dont know it is now 90K and my account was below the old threshold anyhow as I have been making sure it was going to and will remain under it.

Finally got to speak to CS that understood me, and said it was nothing to worry about.

The american cs  ????  said regardless you must have a number no matter what, as the threshold goes up and down all the time like in america, just hung up on him as he just wouldnt listen.

Shall see in 30 days time as the message says that is the time frame to put the number back on or its bye bye for me.

[4_bathrooms]

Did your accountant cancel online or by post? HMRC do provide confirmation of the cancellation; you'll need to provide this confirmation to eBay. It will be either an online confirmation or a letter - either way it should satisfy eBay that you have cancelled your registration (it won't be a "certificate" no matter what eBay tries to tell you).

[papso22]

You should have something from HMRC that confirms you deregistered as below the threshold.  Do you have that?