All fees charged by eBay in the UK are now subject to VAT


Written by: Alan Pearce

From 1 August 2017 the fees charged by eBay to its UK customers (sellers) have become subject to VAT.

This results from a change in its contractual relationship with its customers. Previously, customers contracted with eBay Sarl, an entity located in Luxembourg, and no VAT was charged to business sellers in the UK under the intra-EU place of supply rules. However, as fees are now charged by eBay UK Limited, VAT at 20% will be added.


This change should not adversely affect most VAT registered sellers as they will simply be able to recover the VAT as input tax via their UK VAT returns. However, unregistered sellers (i.e. those trading under the £85,000 annual threshold) and those operating under the VAT Flat Rate Scheme will now be charged VAT by eBay that they won’t be able to recover, unless they choose to register voluntarily or switch from the Flat Rate Scheme to a normal registration.


This change will also catch those sellers who should be registered for VAT but fail to register, some of whom have provided a false or someone else’s VAT number to eBay in order to avoid being charged VAT in the past.


Sellers who are private individuals (i.e. not businesses) are also not affected by this change as they should have been charged VAT by eBay in the past regardless of which EU country the service provider was located.