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Sept 2020 eBay UK Seller Release: 2021 VAT Changes
On the 1st January 2021 VAT changes come into effect which will determine how marketplaces are required to handle VAT on sales. In today’s sellers release eBay set out the VAT Changes and how they will impact sellers on eBay UK and EU sites.
eBay UK 1st January 2021 VAT Changes
- The current VAT exemption for imports of goods in small consignment of a value of up to £15 into the UK will be abolished.
- eBay will collect and remit VAT on consignments up to a value of £135 imported into the UK and sold to consumers.
- In cases where the seller is a non-UK business and the goods are already in the UK, eBay will collect and remit VAT for supplies of goods sold to consumers within the UK.
- If the buyer is a UK VAT registered business and provides their valid UK VAT registration number, the responsibility to account for VAT will switch to the UK VAT registered business customer.
Vat rate display
- All sellers will have to provide a gross price and separate VAT rate on their UK listings, so that eBay can determine the correct amount of VAT to collect from consumers.
- All prices will be displayed inclusive of UK VAT. Where eBay is responsible for collecting VAT, this amount will also be shown separately at checkout.
We’re currently not sure how sellers on specific VAT schemes such as the Flat Rate Scheme and Margin Scheme will handle these changes, but we’ve put in a request to eBay for more details.
eBay EU 1st July 2021 VAT Changes
From 1 July 2021, the EU will introduce significant changes to how VAT is collected on imports into the EU, supplies within the EU by non-EU sellers and cross border supplies by EU sellers.
- The current VAT exemption for imports of goods in small consignment of a value of up to €22 into the EU will be abolished.
- eBay will collect and remit VAT for imports of consignments up to a value of €150 shipped into the EU and sold to consumers.
- For goods where the seller is a non-EU business but the goods are already within the EU, eBay will collect and remit VAT on sales to consumers within EU countries, and from one EU country to another.
- The current distance selling thresholds for intra-EU cross-border supplies will be abolished.
- EU sellers with an annual turnover of more than €10,000 for their complete intra-EU cross-border supplies will have to charge the VAT of the EU country of delivery.
Vat rate display
- All sellers will have to provide a gross price and separate VAT rate on their listings, so that eBay can determine the correct amount of VAT to collect from consumers.
Non EU Businesss
As eBay is preparing for these changes, cross-border trade sellers should also assess the impact on their business and prepare for the changes. It is recommended that you contact your tax adviser for questions on your VAT obligations.
It will be interesting to see how the China man dodges this one. They normally find a way to get around the rules on EBay.
Item location and vat fraud are rife with Chinese sellers
Have known about this for a while and it’s good to progress.
However there are holes like ‘marked as gift’. Which will be exploited to the maximum.
This was off course very common, until the chinese worked out no one really checks anything.
I’m expected many foreign based sellers to fill in UK fake addresses very soon including po boxes or fulfilment centres and nothing really to change. HMRC will keep handing them out VAT numbers without proper checks, there are ZERO checks when you register a limited company, nor are there any proper checks on eBay or Amazon.
It’s taken years to get here, and the fraudsters will adapt very quickly, then it will take years again.
I’m giving up more or less.
Oh, no, Companies House is very modern and up against the fraud 😉
There’s some checks when setting up LTD. I’ve done it (again) recently, and I was asked for a full name along with an address to which they send the activation code so that I’ll be able to pay corporation tax (if any)….
Im still confused…… wont Ebay be collecting VAT from them if they registered in China?
Or are you saying they will open new UK accounts with a false ltd company….
@Derek duval These are my points.
1) You can buy a preregistered ltd company for around £49.00 many websites are offering this. You even nominate a director for not much, as many bankrupt directors do anyway
Companies’ house has little, if any checks when registering, Name, address, and pay. If mail forwarder could be used to receive any letters. I have little faith in HMRC and Companies to block forwarders etc, that would be far to complex for them.
2) HMRC hand out VAT numbers without proper checks and many of them, so getting these repeatedly won’t be a problem.
3) ‘Marked as a gift’ Was more or less how all items were shipped when Chinese VAT fraud started when goods were coming from China. Now it has evolved considerably. (If you read the document on these Changes, VAT will not apply to gifts under xxx value)
4) eBay & Amazon have proved they will actively recruit Chinese sellers, and have opened recruitment drives in China and held a special conference to get them on board. They have no interest in removing Chinese sellers from their platform. eBays no enforcement of manged payments on the Chinese is a perfect example, they don’t want the liability, but 100% want them on board. Who at these companies checks addresses are real? I’ve never seen it.
4) Its been such a struggle to even get to this point. VATFraud.org and Richard Allen of RAVAS have done a wonderful job and presented so much idiot-proof evidence to HMRC in regard to this fraud (They deserve recognition & and every UK retailer should know about them & their work), that’s its still taken 5 years to make the changes required.
5) I’m one of the last UK remaining sellers in my niche, I’m tired now & Burnt out, I personally don’t have faith in HMRC or the Government to plug these holes, which WILL be exploited within any reasonable time. Hence I am 100% looking to scale back my business around 80% and in the process.
The government document on this change states
-non-commercial consignments, such as gifts (gift relief for consignments valued up to £39 will remain
and this is exactly how loads items will be shipped into the UK via aliexpress and co.
‘For goods where the seller is a non-EU business but the goods are already within the EU, eBay will collect and remit VAT on sales to consumers within EU countries, and from one EU country to another.’
So the UK wont be in the EU by then so marketplace will be responsible for the collection of VAT ? Honestly that would be great, save a fortune in accounting fees.
So what will happen with small UK business sellers who are not VAT registered as their annual turnover is below the VAT threshold?
Francois, this is also what I am trying to find out, but in the other sense – an EU seller, selling to other countries both in and out of the EU. I assume eBay will be forced to collect the VAT on the sellers behalf regardless of them being VAT registered or exempt.
I would like to know how they intend to apply it, and if we can choose the correct rates (not everything is set at 20%) for our category. Will some buyers see one price inclusive of VAT, and buyers elsewhere see a different price? I’m full of questions. For those of us struggling to get by on small incomes, it is not the best of changes.
does this mean we can no longer pocket the vat element of sales to to non-eu countries like US and Aus?
Pretty sure VAT would be removed from these sales, similar to Amazon. As eBay would mark it as a non VAT Export and hence not apply VAT.
Once we go down this road, the VAT algorithm could be set to exclude the channel islands as well as business to business sales where VAT is not applicable. How far they go with it, we will have to see.
We’re on a the “Global” VAT scheme and sell all collectables and antiques – not sure how this will work?!
let’s see if it makes any differnce (i hope it does) as of today, thouands of office chairs and other items being sold by chinese sellers, who are not paying vat, and must simply be sending form a UK warehouse.. (non of these are up to UK Fire standards but eBay doesn’t really care and niether do they). Fair competition is almost impossible 🙁
Lol, office chairs seem to be completely taken over by Chinese traders.
Shameful to the UK really.