ad general fee calculation

[stickbase]

Hi

I am concerned about the ads fee charged on each sale

for example a product is sold on eBay for £219.90, obvious this is the price customer paid and includes VAT.  Ad fee rate is set at 17% and for this order I am charged Ad fee general £44.86 while I think fee should be £37.38 at 17%

If eBay is charging 17% ad fee plus VAT, only then it can be equal to £44.86.

But my question here is that the total price customer has paid includes VAT and 17% of 219.90 is equal to 37.38 and includes VAT element already so why another 20% is charged on top of that.

Please note, on eBay invoice, the VAT is charged again on top total cost of advertisement if I am not wrong. 

Please help us urgently as we noted this has been happening since long time

Regards

[papso22]

You are talking about two different supplies and two different sources of VAT.

One is the supply of the item which if the seller is VAT registered will have VAT on.

The other is the supply of advertising to the seller by ebay, which is a taxable supply and has VAT on because ebay is VAT registered.

VAT in the UK is 20% which means that where a price is VAT inclusive it's calculated as 1/6.

[stickbase]

I understand what you mean but I try again to elaborate my point

I sold something for 219.90 and I have to pay VAT on this amount. eBay is
taking 17% of this sale amount as advertising fee and then charging VAT on
top. Does that make sense?

eBay is not invoicing me separately for ad fee, but deducting it from the
gross sale price which includes customers VAT and net product price.

[papso22]

If you are VAT registered your prices on ebay include VAT. 

Ebay charges you VAT on their promotion fee, there is nothing wrong with that fee being based on your VAT inclusive price to your buyers.

They are two totally separate supplies.