UK VAT rules starting Jan 1 - clarification needed

[darak10]

I have a quick question about the new UK VAT rules starting January 1 - does this 15 pound / ~25 CAD amount include shipping, or is it just for the declared value of the item not including shipping?  

[pjcdn2005]

I'm not certain but I don't believe that it includes shipping. But unless you are registered to collect VAT and are listing directly on the UK and/or EU sites, it shouldn't affect you as ebay will be collecting it.   The way that I understand it, if  you are listing on those sites and you aren't registered to collect it, you would just put 0 in the VAT field since VAT wouldn't be included in your price.  All of the above info is just for sellers listing on ebay.

IMO the announcement they posted is poorly thought out as it gives a bunch a info about registering etc and then later on states that if we are listing on ebay we don't have to do anything.

If you are asking because you have your own site or on a site where the marketplace is not collecting the VAT, some of the info on the following page might relate to that.

https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-custom...

[marnotom!]

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@pjcdn2005 wrote:

IMO the announcement they posted is poorly thought out as it gives a bunch a info about registering etc and then later on states that if we are listing on ebay we don't have to do anything.

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I think whoever put that announcement together knew exactly what they were doing: Get the reader panicked, and then settle them down with the reassurance that eBay had it all under control.  ("Wow!  Am I glad I'm selling on eBay instead of somewhere else!"  😜

[recped]

For one simple fee of 13.35% for "administration"!

[darak10]

I just wanted to ask because I don't know how they calculate it, if they include shipping to calculate it, or what. I suspect they do include it (and will, come Jan 1) as it is an expense they are paying and tax authorities always want more money, especially the UK given this entire Brexit covid boondoggle they are going thru.

I totally agree on the release, but thankfully it does clarify the matter. Just let them do it - works for me!

[marnotom!]

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@darak10 wrote:

I have a quick question about the new UK VAT rules starting January 1 - does this 15 pound / ~25 CAD amount include shipping, or is it just for the declared value of the item not including shipping?  

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If I'm correctly reading the eBay announcement now that it's been updated by tyler@ebay, it states that the £15/$25 limit is a thing of the past.  There is a new £135 threshold on applying VAT to items purchased on eBay where eBay will charge the VAT directly to the buyer, and that threshold does not include the shipping price.  For purchases exceeding that limit, the buyer will be responsible for paying any import VAT due.  I'm not sure if the shipping price is taken into consideration for VAT charges at that point.

[darak10]

you are totally correct, I ended up re-reading it too as I misunderstood it myself.  I have a had a couple UK customers so far today and looking at the invoices, the 20% VAT is collected on the total amount - price of item + shipping, not just the price of the item.  They do include shipping when calculating VAT.  

[marnotom!]

I’m assuming these sales were valued at less than £135 in order for eBay to be charging and collecting the VAT due.

[recped]

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@darak10 wrote:

you are totally correct, I ended up re-reading it too as I misunderstood it myself.  I have a had a couple UK customers so far today and looking at the invoices, the 20% VAT is collected on the total amount - price of item + shipping, not just the price of the item.  They do include shipping when calculating VAT.  

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Yes, the value of the Item alone is what is used to establish if the value is above or below £135.

This works exactly the same as the old di minimis free import limit of £15, the Item value had to be more than £15 to be taxed and if it was over the limit the entire amount including shipping would be taxable.

Keep in mind that VAT rules are different than Import Duties, for the Value For Duty shipping charges are not included.

[dhslk]

OK. I think that ebay has probably screwed up the VAT launch. I wondered if anyone else has experienced this:

A few days ago, a UK buyer placed an order well over the GBP135 threshold (about Cdn$1000). They contacted me today, stating that their account had been overcharged by about GBP30, which would be about 20% of GBP135. We are still trying to figure out what the charge is, but this seems like too much of a coincidence to me. Perhaps, instead of charging 20% on orders up to GBP135 and 0% on orders over GBP135 (buyer is to pay COD), they are instead charging 20% on the FIRST GBP135, which is WRONG!!

Has anyone else had this happen? It could be exchange rate fluctuations, I guess, but is pretty steep for that.

[recped]

I haven't had a UK sale since Jan 1st but I'll be checking when I do. Unfortunately for checking purposes I'm not likely to have a UK sale over £135 anytime soon.

Have you looked at the Order Details or whatever report shows you the amount of tax collected by eBay. I'm in MP so I don't know where a PayPal seller can find this info, maybe it shows in the PayPal transaction details.