eBay UK Sellers: Avoid paying unnecessary VAT

What is VAT?

VAT stands for ‘value added tax’ which is the tax that is charged on services that VAT registered businesses provide inside the European Union. 

As a UK seller, you are in contract with eBay Europe, and are required to pay VAT at the rate of 15% on your eBay selling fees (likewise how you have to pay VAT when purchasing a SaleHoo membership). However, if you if you run a registered business and have received a VAT ID number (issued by your tax authorities), you may qualify to register for exemption from VAT on eBay fees.  And after paying both listing and Final Value Fees on eBay, it’s well worth taking a short time to make yourself exempt to save you some money.

If you don’t qualify, it is eBay’s responsibility to charge you for this tax. The cost will be included in the fees eBay deducts from your sale. Therefore you don’t need to do anything. 

2 simple steps to register from VAT exemption 

  1. If you have a VAT ID number and use your eBay account exclusively for business, you can register your business with eBay. To do this, you will need a UK postal address or landline telephone number and details of a bank account that accepts Direct Debit instructions.  
  2. Once you are registered as a business with eBay, you need to register your VAT ID number with eBay. Once you have completed this step, you will be exempt from VAT on eBay fees.

Before you register

Remember that all transactions on your eBay account will need to be business-related in order to qualify for VAT exemption. Also remember that VAT exemption is accompanied by a responsibility that you will self-assess your VAT exemption eligibility.

If your circumstances change and you are no longer eligible for VAT exemption, you need to contact eBay about it immediately.