New VAT Regulations.

Foobar

Club Member
Jul 30, 2017
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Great Yarmouth, NORFOLK
Not many people know this.....( I didn't ).....probably affects Gumtree too......believed to affect Aliexpress / Alibaba and possibly ALL goods on sale in UK from abroad ? :eek:

It is due to new Customs & Excise regulations to remedy the problem of loss of revenue to the Exchequer and unfair advantage to foreign suppliers, regarding clearance into the UK of goods from abroad. ( Not Brexit as you might expect, but a coincidental and long overdue review of how we treat foreign goods and ensure fair competition ). See here :-

https://www.gov.uk/government/publi...s-goods-sold-to-customers-from-1-january-2021

Summary - From the 1st January 2021, eBay will be adding VAT at 20% to most prices / purchases delivered to the UK :cautious:

( please check, if you have your eye on any such goods, as they may have gone up by 20% ! )

on

Items under £135

Items located in the UK, where the sellers are not VAT registered

( Tbh, I'm not sure even eBay have interpreted this correctly ! )

Click on 'Learn More', next to the new VAT uplift warning, during eBay Checkout as per the example within the Red Ring on the picture shown :-

VAT on eBay 1.jpg

The item shown was purchased before Jan 1st 2021 and was bought at £3.99 ! It hasn't been paid for, because similar changes are being made at PayPal, which have effectively disabled my account, so I couldn't pay !

...or you could follow this link ( see right at the bottom after all the US Sales Tax stuff ) :-

https://www.ebay.com/help/buying/pa...query=Paying tax on eBay purchases&intent=tax

or see a relevant extract here :-

VAT on eBay 2.jpg

I spent quite a while trying to fix what appeared to be anomalies at PayPal and eBay before I realised what the problem was. ( I thought I'd bought something for £3.99 and didn't understand why I was being asked to pay £4.78 ). Customer support staff at BOTH eBay and PayPal did not know what was happening either and still don't as far as I know - scary !

Personally, I'm not happy to have to pay 20% more on foreign goods, why should I be ? However, looking again at eBay for 3A fuses and competing products, there is a UK supplier offering them at £5.15 for the same item. In hindsight, I would definitely have bought those instead, happily supporting a UK supplier, getting them a fortnight sooner and only spending a few pennies more - So I think this is ultimately a GOOD THING for UK businesses and the UK generally !

MODS - If you are not happy with this post being in this thread ( although it seems ideally placed imho ), please do not delete it, as it took time to research, type and check. Perhaps you would instead kindly move it to another, more relevant thread if you consider it necessary. Thank you...
 
Foobar.
Thankyou that's an interesting post, I wonder will Martin Lewis Smith flag this up on his financial updates. I signed up for his monthly email, some of it is small fry other stuff , like you have here is interesting.
I adjusted my tax code as a result of reading his stuff as I'm working from home.

If you want some 3A fuses and you can cancel that sale I've a feeling I've got some sitting in the garage. I'll put them in the post if you want them. I'm going to the post office tomorrow so PM welcome. I've been clearing my stock of elec stuff to Ebay as my role is very different now its just wasting space.
 
Orders under £135 from abroad or selling in the UK where seller is not VAT registered.... are they adding this VAT on only for business seller accounts or all accounts? If I sell an item on eBay my buyer shouldn't have to pay VAT on it as the VAT was already paid when I originally bought it myself!
 
It'll only be for business sellers David , the goods in the UK will be refering to drop shippers who might have a warehouse in the UK but are registered abroad ie to avoid tax in the first place
 
Well spotted David`, that was the reason for my hesitation about eBay understanding things.

I can tell you that my wife has sold something on eBay earlier today, and VAT was not added to the final price. I have just asked her to look at her listings and she is happy that all the prices are the same as ever.

I monitor about 300 items in my Watch List and I am pretty sure that a lot of the overseas ones, mostly Chinese and far eastern, some US, have increased by 20% as suggested, just like those fuses.

So I think they mean 'business sellers' and new goods that originate outside the UK.

I swear that this morning, the fuses showed as £3.99 on eBay, but £4.78 at PayPal. However, they are now definitely £4.78 on eBay too. PayPal had little to no Customer Service cover until this morning either. But neither of them suggested the 'error' in the price was due to VAT changes. eBay even suggested paying against the invoice the seller had sent ( because I couldn't use my PayPal ) which said £3.99, but that didn't work. I spotted the new 'VAT added' bit myself on the eBay checkout page and then the penny dropped.

This just brings some of the usual customs tariffs to much smaller transactions. HMRC have cleverly shifted the responsibility for collection to the seller ( or the host in eBay's case ). Quite clever really...

- - - Updated - - -

It'll only be for business sellers...

Spot on Dan...
 
Thanks for all the info. Really interesting stuff. The international drop shippers are my pet hate at the moment. Usually listed as Location: UK or GB on the item, but the account is based in China and the parcel comes late and full of customs declarations with Royal Mail sticker on top. Whenever you message to ask why it's late you get the same "royal mail is busy due to coronavirus" line. Tried reporting to eBay but nothing gets done. Maybe this VAT increase might stop them
 
If I sell an item on eBay my buyer shouldn't have to pay VAT on it as the VAT was already paid when I originally bought it myself!

I’m not VAT expert but I’ve considered buying a second hand van. Always been put of by VAT being added onto the windscreen price. Based on this small example VAT can be charged twice on the same goods.

If I buy goods at wholesale then retail them out as part of an installation VAT can be charged on that install. Again VAT paid twice.
 
But that's because it's being sold by a VAT registered company as part of a business making income. My example was about private sellers moving things on. You wouldn't see VAT on top of a van being sold privately for example. Some traders do VAT free sales to other VAT registered companies but have to charge VAT to a personal sale I believe. Again not an expert but that's my understanding of the difference