eBay Charging All Fees on eBay Collected Tax

[secondphaseapparel]

Hey everyone!

I was hoping that someone could help me to understand something.

I understand that eBay has an obligation to collect taxes, charge fees, charge VAT for using the services based on UK and international law, and all of these things. I love the platform and am obviously happy to pay the fees that we need to pay to continually use the services and supply our product to their customer base.

With that being said, I need a little bit of clarification on something.

I sell a lot of my products to people overseas and I sold an item the other day, which was a low-value item, and I realised it was sold at a loss. I thought that this was a little odd because I obviously did a little bit of math before posting it, and although this particular item wasn't supposed to make excessive profit, it wasn't supposed to lose money either, so I looked into it a little.

This particular item was sold to Germany, and I realised that eBay is taking the mandatory VAT collected from the buyer for the international sale (which goes directly to them), and they are then adding it on to the order total for the seller and using this as the sale amount. They are then using this amount to charge the final value fee, regulatory fee, international fee, ad promo fee, and the UK 20% VAT before deducting it again. So in essence they are making it appear that the sale is of a higher value than it really is to make more profit. On top of that, the transaction layout does not show that this is being done, and the layout actually leads you to believe that this has not happened unless you go through in the most in depth breakdown of the specific transaction.

If anyone could share their views or opinions on this, that would be great because for me I feel like it's very unfair and somewhat shady of eBay to use this mandatory tax payment from the customer to increase the profits and charges of the seller's fees before removing it and sending it to the relevant authority.

I also contacted eBay regarding this matter and they were unable to understand what I was refering to. I told them too that if this is the case then we need to be able to know where the customers are located and the additional international VAT amount that is going to be added to our orders total prior to the sale and before accepting any offers or giving customers a discounted price. For example this transaction I have mentioned was a VAT rate at 19% but another transaction after this was a VAT rate of 23%. How can we effectively manage our mark ups with whats essentially hidden fees?

I look forward to this discussion with you all. All the best and happy selling!

[rainbowtrax]

I agree with you that it's unfair and unnecessary and is just a way for ebay to take an even bigger cut. But this is ebay and this is how they've always done it. I'm sure they would argue that it costs them to process the VAT and someone has to pay but, as they've now introduced a "regulatory operating fee" allegedly to cover their costs, they're effectively making sellers pay twice. But it's their site, they can do what they want and, being in it to make profit, they will always charge sellers as much as they can possibly get away with.

The only way you can mitigate the losses is to adjust the overseas postage costs to cover all the extra fees - FVF on a much larger amount due to higher postage, FVF on an even larger amount due to VAT, additional percentages of international fees on the whole lot. The item price itself can't be adjusted for different buyer locations so that only leaves the postage element as a way to pass the extra cost on to the buyer. Maybe not wholly ethical but someone has to pay. Like ebay, you're in business and there's no point selling at a loss. Ebay pass it on to you, you pass it on to buyers.

[papso22]

The fees are not hidden, they are one of the few things clearly laid out in the help section on the site.

Basically eBay's business model is to calculate its fees based on the total the buyer pays, irrespective of whether that is what the seller has charged.   

They are a business and there is nothing that says they have to be fair to sellers.

That's all there is to it.

[a45heaven]

They are a business and there is nothing that says they have to be fair to sellers.

And i trust sellers will remember that when ebay want something from those sellers !! 

Would you recommend ebay to a friend (or enemy?).

What can we do to improve?

Following specific process'. as advised by ebay.

Opting into new ventures designed by ebay.

Paints a new complexion to life on ebay.

[uraniumtech]

You have the base for a lawsuit. NO ONE is allowed to collect ANY FEES ON VAT(not the banks, not the shops, not EBAY, not ANYONE.  Here are facts. VAT is 20% not 23% not 19% (varies on product category) 

You don't get to keep the vat, goverment takes that. 
If ebay wan's to insert an operating fee they have to modify their payments system RIGHT NOW.
As it is now is illegal and you are in the right. 
I was looking for the same kind of info when I found your post. 
These 2 pictures were the exact same product. If you think that ebay is doing is ok you are very wrong. 

[4_bathrooms]

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@uraniumtech wrote:

You have the base for a lawsuit. NO ONE is allowed to collect ANY FEES ON VAT(not the banks, not the shops, not EBAY, not ANYONE.  Here are facts. VAT is 20% not 23% not 19% (varies on product category) 

---

The standard rate for UK VAT is 20%; the OP is not VAT registered so - other than the (UK) VAT eBay charges on it's fees - UK VAT is not their concern.

If you sell an item valued €150 (currently £128 approx.) or less to an EU buyer eBay is responsible for charging and remitting the EU buyer's domestic VAT - each EU member country sets it's own VAT rates. For example, a Hungarian buyer will be charged 27% VAT whilst a Luxembourgish buyer will be charged 17% VAT. eBay's final value fee is based on the total paid by the buyer including any local taxes eBay was obliged to charge and remit. There is nothing illegal about this but it does mean eBay are charging their fees on the highest possible amount in order to maximise them. As per eBay:

"The final value fee is calculated as a variable percentage of the total amount of the sale (which includes the item price, postage, and any applicable taxes), plus a fixed charge of 30p per order."

[plpmr]

of course there's also a new regulatory operating fee.

[a45heaven]

a new regulatory operating fee

Pray tell what regulations these fees are for?

Why is it a Percentage rather than a fixed fee?

It was suggested the passing of our data to HMRC was a part of it. (Sellers were promised we could access the info which ebay was sending, but thats never happened)

ebay have already started taking the fees, why was it not combined with the standard fees?

[papso22]

All the information available to members about this new fee is set out on this site for all members to access.  If it's not there then we won't know the answer.

Ebay hasn't sent any data to HMRC yet, so there is nothing to share with sellers.  It starts in January 2025.

[ett1954]

@a45heaven :

"a new regulatory operating fee"

"Pray tell what regulations these fees are for?"  -  The costs eBay are incurring in providing required information to the regulatory authorities.

"Why is it a Percentage rather than a fixed fee?"  -  eBay's accountants have obviously calculated that this will raise more revenue

"It was suggested the passing of our data to HMRC was a part of it. (Sellers were promised we could access the info which ebay was sending, but thats never happened)"  -  They haven't started yet.  Along with other digital sales platforms they realise this is going to put the wind up a lot of private sellers, especially 'private' business sellers creating an exodus of buyers and sellers from the site.  They will leave it until the last minute - the deadline for providing the data is January 31st, 2025.  Expect them to start asking for NINOs towards the end of this year.

"ebay have already started taking the fees, why was it not combined with the standard fees?"  -  By keeping this fee in isolation it will allow this particular fee to be increased in the future with eBay still claiming basic fees have not risen.

[a45heaven]

thanks for that.

The description below does not fill one with confidence that its just an excuse for increasing fees.

Why is the Reg Fee a sliding amount through a percentage rather than a fixed amount?

So as HMRC receiving into their FUJITSU system our confidential info does not start until Jan 2025 - this regulating fee excludes this element.   

Why is the regulatory operating fee being introduced?

We’re introducing this fee to address the rising costs associated with the increasing number and complexity of regulations impacting eBay’s marketplace - including consumer and environmental protection, as well as new taxation and customs measures.

[ett1954]

@a45heaven :  " ... HMRC receiving into their FUJITSU system ..."

Just to correct HMRC's Connect system was developed by BAE Systems.

[roverviews]

Well Im feeling a bit silly as ive only just noticed this  and have to admit I didnt realise in all these years . Should have checked sooner as it seriously affects the viability of selling international items on here.

I wondered why my selling fees seemed to be quite high. Now I realise and Im a little disappointed not to have noticed earlier.

It feels a bit  greedy to me. Im sure they are legally allowed to do this, they must have an army of lawyers that have looked into this. But it just feels wrong to be charging fees for collecting our taxes when they are already charging a regulatory fee and international fee anyway, which should surely cover the VAT collection.  And it is not something that Im aware of other companies doing, or maybe openly doing.

That takes the total fee on the entire amount including the VAT to a fee percentage to close to 19%.

On the original sale amount plus postage, (without the VAT), the percentage of fees is then nearly 23%, WOW. Still, at least it must be reaching the upper limits of what sellers will accept, so is unlikely to go higher, or they will be losing sellers.

That really puts it into perspective.
I wouldnt mind, if I thought it was good value for money.
Is Ebay's quality of service worth 23% of your money?

[a45heaven]

i think thats why the REGULATORY FEE is shown as separate to make FVF seem lower (below the 10% barrier).

The CS wont expand as to what these fees are actually for, apart from a general comment about sellers paying for what ebay get charged, and then add tax.

Remember Managed Payments was sold as having a simplified Invoice system, me thinks not.

[roverviews]

I would Urge everyone to re-visit this and check their international fees. It could be becoming unviable to sell internationally. If your margins are tight, you are losing money.

I have just checked one item which was £15 and £14.75 tracked postage to Croatia. The VAT charged was 25%, which is £7.44. Add that to the total and then, the total fees become £6.75, which amounts to 45% of the actual value of the item, assuming you are not making any income from the postage, thats nearly half of your income in ebay fees.  I checked another, higher value item sale to the US, on which 8% VAT was charged.  The fees on this worked out at 30% of the actual item value.  And 20% of the order value, (item+postage) or 18.5% if you add the tax charged (what ebay call the total order value).

[pinkrabbitprinces82]

Yes I had that to it made no sense what so ever! I don't ever recall being charged a sellers fee on the customs chargers, only on the item price and any postage costs. I've been going backwards & forwards lately through ebay trying to get answers. Like you say how are we supposed to be able to work out the TOTAL final value three on the item things as in  1)The item price, 2)Postage costs and 3) the recipients customs chargers. 

If we don't know in money value how much the custom chargers are in each country across the world because every country chargers a different rate. Like you say near the bottom of your post. When you list an item ebay doesn't confirm to you what the total amount in currency will be in customs chargers, so you can work out the 3% international charger altogether. The only information I have to work out the final value international fee's before listing is the item price and postage costs to each country. I have no idea what the customs charges are going to be in advance to say somebody in France, or usa. eg like is it £50 customs or £80 uk pounds extra the recipient will pay. So how do I work out the total fee without that last bit of information?

I sold an item for £125 uk pounds including including postage costs yet it said my sales were £153.75. I though that can't be right,  as I only made £125.00. Looking at my payments screen they have stated the recipients customs chargers were £28.75. Why I was seeing that privet information I had no idea it's not my responsibility to pay the import customs taxes for the recipient outside the uk (my country). yet it seemed I was charged the international fee of 3% on not only the item price & postage costs, which I did already work out that final value fee in advance before listing, but also on their ( the recipients), customs chargers. That sounded like a big con to me. I am being charged a sellers final value international fee on recipients customs chargers, which is money I don't receive as the customs chargers/duties go into the governemnt bank. I don't or didn't receive that money so i've been charged 3% on customs money I didn't receive!

I think I might write to money saving expert and my local mp for help as this seems illegal. I can understanding paying a fee on the item price and postage costs  because that is money paid to me into my bank, but the customs money is NOT being paid to me. ebya got some nerve!

[papso22]

Yet another 'it seems illegal post' where no-one is prepared to check with an proper legal expert.

Ebay has a very clearly advertised fee structure, if you don't like the fees, don't sell on here.

The international fees are to recoup some of eBay’s costs in processing an international payment, so they charge them on the entire payment the buyer makes, including any customs charges, VAT etc.  Those charges are not private information and sellers need to be told them so that they understand the fees.

PayPal also used to charge higher fees for international transactions and so does Ebay after managed payments came in.  Just because you can't remember it doesn't mean it didn't happen. 

[pinkrabbitprinces82]

your obviously didn't read the end of the original ladys posts on knowing the country's customs fees are to work out the %3 fee on that or have read my reply stating the same thing. the only time i see the recipients customs charges is after the sale not before. so the international fee for uk is 3% that is 3% on the price/postage costs which I already know because i'm listing it. I can work out 3% off fee's to come off on THAT AMOUNT ONLY! since all country's fees and vat rates are different. like some county's in the the tax is 20% other it is a low as 6%, my friend in one county in USA confirmed this and where she lived in her county of the usa it's 6% customs import fees. since there are loads of country's in the world all with different rules and amounts on customs chargers, how is the seller to know that and work it out in advance for each country they post to. that si what you have missed in your reply, that si what both the lady post & I are saying. It's NOT the fact ebay havn't disclosed the fee percentage, i'ts the fact we can't work out the full amount INCLUDING THE CUSTOMS in advance of sale as we don't know. I don't know right now what the customs charges will be to in money value to somebody say in France on an item im selling for as an example £100 plus £20 postage costs. again since all country's rates on import taxes are differer. I as a seller cannot work out the total amount including customs because we don't know what it will be in money value. Do you? the only information we have beforehand is the item price and postage costs, so we can only work out 35 on those two amount, NOT the customs. clearly you haven't read what we were actually on about. i certainly had never been charged before on a recepients customs charges for money i didn't receive and ebay never messaged on a change of policy in that department or why would t be a shock to some people and I do try and keep up with every message ebay send. certainy seems you missed the main point of the issue and it wan't about the fairness or that the 3% fee is not displayed, it's the fact we don't know advance the customs charges exactly down to the last penny.

[papso22]

"it's the fact we don't know advance the customs charges exactly down to the last penny".

That's right, you don't, and can't.  But that's not 'illegal'.

When did you make your sale that you say had no fee on customs charges?  It is possible to go back to ebay's previous policies using the Wayback Machine.

This is what it currently says, and I think has said since managed payments came in.  Before that the international fee was part of PayPal's charges for handling the payments and not ebay's selling fee.  Perhaps that's why you don't remember it?

International fee

If your registered address is in the UK, we charge an international fee of 3% if the delivery address for the item (entered by the buyer during checkout) is outside the UK.

This fee is calculated on the total amount of the sale and is automatically deducted from your sales proceeds. The total amount of the sale includes the item price, any handling charges, postage, and any applicable taxes.