May 14, 2017
UK eBay sellers to be forced to pay VAT on fees
Tens of thousands of eBay sellers in the UK will be forced to pay 20 per cent value added tax on their fees when the online marketplace overhauls its corporate structure later this year. eBay has told sellers living in Britain that they will have to start paying fees to its UK business, instead of its Luxembourg subsidiary, from August. The changes will have the biggest impact on traders that have a business account with eBay but have not registered for VAT. In a message to these customers earlier this week, eBay said: "You'll begin paying 20 per cent UK VAT to eBay Limited on taxable fees and won't be able to reclaim VAT paid unless you register for VAT with HMRC.". Richard Asquith, vice-president of global indirect tax at Avalara, a VAT technology company, said: "While most affected eBay businesses will be able to recover any new VAT charges, thousands may face an irrecoverable 20 per cent VAT charge." Most private individuals who use eBay to sell goods will not be affected because they generally have a turnover of well under the £85,000 VAT threshold - meaning they are already paying 20 per cent VAT on their eBay fees.
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