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Important Update about UK VAT

Starting on 1 January 2021, the UK introduced a new model for imports to ensure goods from outside of the UK are treated in the same way as goods already in the UK.

The VAT exemption is abolished.

eBay started to collect and remit VAT for UK imports on all consignments with a value of up to £135. In cases where the seller is a non-UK business and the goods are already in the UK, eBay collects and remits VAT for goods sold to consumers within the UK, regardless of their value.

Depending on whether you have a BUSINESS account registered on ebay.co.uk, there are different scenarios and actions for you.

You DON’T have a BUSINESS account registered on ebay.co.uk

You HAVE a BUSINESS account registered on ebay.co.uk

You DON’T have a BUSINESS account registered on ebay.co.uk

You don’t have to take any special actions, just be aware that for UK buyers VAT of 20% will be added automatically to your item price and eBay will pay it to UK governance.

Example scenario for you:

US listing with UK browsing experience and delivery address

Goods listed in the US. A buyer is browsing from the UK site, and the item will be delivered to the UK. Price displayed to the buyer includes UK VAT. Checkout will display 20% VAT, as it is UK delivery.

Listing site:US
Buyer browsing site:UK
Buyer country:UK
Net price:100
Seller input VAT:N/A
Seller listing price:100
Correct VAT:20%
Search Results Page (SRP) price:120
Checkout price:120

Because the buyer is browsing on the UK site, the items will be listed with an SRP of 120 (including UK VAT), not 100. From a legal POV, all prices on the UK website need to show the price including the UK VAT. Checkout price will include UK VAT, as delivery is in the UK.

You HAVE a BUSINESS account registered on ebay.co.uk

Starting March 1, 2021, eBay will make it mandatory to add the VAT rate on all UK and EU sites when listing items. UK Business Sellers should begin adding the applicable VAT rates on all their existing and new listings as soon as possible.

Business sellers trading with UK buyers and listing on the UK site (ebay.co.uk) will need to provide both gross prices and the applicable VAT rate used to calculate the gross price on all listings (you will see a special field for that).

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If you don’t have this field please contact Customer Service or your Growth Advisor.

There are two ways to set VAT rate:

1) Set VAT rate = 0%

In this case eBay will treat item price as a net price and will add 20% on top of it for the buyers from the UK (a buyer pays 120%, the seller gets 100% of the item price).

2) Set VAT rate = 20%

In this case eBay will treat item price as a gross price and will collect 20% VAT if the buyer is from the UK (a buyer pays 100%, the seller gets ~83% of the item price).

If you do not provide this information on time or set 0% VAT, eBay will have to assume that your price provided is the net price and will automatically add UK VAT on top to the prices displayed to buyers.

Example scenarios for you:

Scenario 1

UK listing & browsing experience & delivery address

Goods listed in the UK and delivered to the UK. Price displayed to the buyer includes UK VAT. Checkout will display UK VAT based on the UK delivery address.

Listing site:UK
Buyer browsing site:UK
Buyer country:UK
Net price:100
Seller input VAT:10%
Seller listing price:110
Correct VAT:20%
Search Results Page (SRP) price:120
Checkout price:120

eBay will override seller VAT when C&R applies (excluded import case exceeding GBP 135).

Scenario 2

UK listing & browsing experience and US delivery address

Goods listed in the UK are delivered to the US. Price displayed to the buyer includes UK VAT. Checkout will display 0% VAT based on the US delivery address.

Listing site:UK
Buyer browsing site:UK
Buyer country:US
Net price:100
Seller input VAT:20%
Seller listing price:120
Correct VAT:20%
Search Results Page (SRP) price:120
Checkout price:120

Because the buyer is browsing on the UK site, the items will be listed with an SRP of 120 (incl. UK VAT). Checkout will charge original price as given by the seller where applicable based on the delivery address.

Your eBay invoice will contain information about paid VAT. On the matter of filing tax returns contact your tax advisor

Information above is not intended as tax or legal advice. We recommend that you seek independent tax or legal advice to ensure compliance with applicable laws and regulations. You can also find additional information on https://www.gov.uk/transition

Please contact your shipping provider for more information on the customs process.