Buyer Protection And Taxation

[cadaverama]

Does eBay pay tax on buyer protection fees? I suspect most of the money it collects is not paid out and kept as profit as it is certainly not refunded to buyers who accomplish an unproblematic purchase. 

[61stephenuk]

Buyer protection fee is nothing to do with paying money out, if you enter 'buyer protection fee' in the  Help & Contact section on any eBay page you can find out exactly what it is for.

[papso22]

Presumably ebay declares all its income for tax purposes.

The BPF is income.

[cadaverama]

But what does eBay do with that money? Keep any surplus as profit?

[papso22]

What surplus?

It's a fee that goes towards their general operating costs, there is no specific cost that will be offset against it.

[tobiasd4]

All ebay has done is move fee to buyer from seller for private accounts. 

[cadaverama]

But it purports to be raised for buyer protection.

[cadaverama]

So why is it called a buyer protection fee? It should be called a buyer
fee for sake of transparency.

This is all very interesting. I wonder how it squares with UK accounting
rules, and I am planning to refer this to the Information Commissioner.

[61stephenuk]

I agree it should be called a buyers fee but eBay didn't want to say they were charging buyers so they parcelled it up with the things shown on the page I linked to in order to show buyers they were getting something for the fee, most of which were previously covered with the seller fee and they could advertise no fees for sellers.

What eBay could have done was reduce the seller fee and advertise the fact something like "We have reduced the fees for sellers on eBay and still no fee for buyers" instead of following what other sites may do

[papso22]

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@cadaverama wrote:
So why is it called a buyer protection fee? It should be called a buyer
fee for sake of transparency.

This is all very interesting. I wonder how it squares with UK accounting
rules, and I am planning to refer this to the Information Commissioner.

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What a waste of everyone's time!

[cadaverama]

Yes. It is all a bit confusing. But I get it now. But it seems to accrue
to my sales account. Perhaps it shouldn't show there at all.