Online marketplaces and VAT

With effect from 1 August 2017, eBay sellers living in the UK will be doing business with eBay (UK) Limited rather than the Luxembourg based eBay Europe.

This means that UK VAT standard rate of 20% will be added to their eBay fees and subject to the normal rules for input tax deduction, this VAT can be claimed by VAT registered businesses, except Flat Rate scheme users.

Therefore, VAT registered businesses will no longer have to worry about applying reverse charges when the fees were charged by eBay Luxembourg.

Those businesses who are not VAT registered will continue to pay VAT on their eBay fees.

These changes have been made after the UK Government announced measures to tackle VAT evasion by overseas online sellers, who sell goods in the UK through online markets.

Online marketplaces such as eBay have to ensure that their overseas customers are registered for VAT, or they could become liable for the VAT themselves.

We have VAT experts on-hand to be able to assist you with this, or any other VAT query. Please contact David Barraclough on 01522 531341 or email david.barraclough@wrightvigar.co.uk – he would be delighted to help you.