eBay to force all UK traders to pay VAT

eBay traders will be forced to pay VAT on all purchases under new corporate structure rules to be launched later this year.

Prompting the move, the online marketplace has been under attack from the Government after it emerged that the UK is losing up to £1 billion a year because of fraud or errors by online traders.

It will largely affect businesses that use eBay but are not VAT registered.

“You’ll begin paying 20 per cent UK VAT to eBay (UK) Limited on taxable fees and won’t be able to reclaim VAT paid unless you register for VAT with HMRC,” said eBay in a message to customers earlier this week.

It means that thousands of businesses will be unable to reclaim the 20 per cent VAT charge unless they register for VAT.

The current VAT threshold – the revenue at which businesses must legally be VAT registered – is £85,000, but businesses can opt in before exceeding the threshold.

In a statement, eBay said: “We will continue to work closely with HMRC to ensure that all sellers on our platform comply with the law.

“In 2016, we began the process of realigning our legal structure, following the spin-off of PayPal, to better reflect how we manage and operate our platforms. Now, in 2017, we are changing the contracting entity for eBay users located in the UK.”

“eBay’s net prices will not change as a result of this contracting party change. There will be no change to our service as a result of this change, and sellers will not need to make any updates to listings.”

Businesses who are VAT registered will be able to claim a tax credit that will offset the VAT they paid, unless they are using the simplified “flat rate” VAT scheme.

Next Government urged to keep SMEs “front of mind” during EU trade talks

Small and medium-sized enterprises (SMEs) should be “front of mind” during all trade negotiations with the European Union (EU), the Federation of Small Businesses (FSB) has said.

The comments follow worrying data published in recent weeks regarding Britain’s ‘widening’ trade deficit during the first quarter (Q1) of 2017.

According to the Office for National Statistics (ONS), UK exports continued to take a hit from weak values of sterling.

The ONS’ data also reveals that the UK’s industrial output fell by 0.5 per cent in March 2017 – much sharper than the 0.3 per cent fall previously estimated.

Furthermore, a separate report published by money transfer firm World First has revealed a ‘significant slowdown’ in international trading between Q4 of 2016 and Q1 of 2017.

Following the troubling research, FSB chairman Mike Cherry has called on the next Government to offer greater support to Britain’s SMEs, ensuring that small businesses are “put at the heart of EU trade talks.”

He said: “As the next Government embarks on a post-Brexit global trade drive, small businesses should be front of mind.

“Securing bold and ambitious free trade agreements with the EU and other priority countries will be critical to boosting UK exports, and we want to see a small business chapter in all future trade deals, dedicated to small business needs.”

He added: “Our research has revealed huge potential to double the number of SMEs exporting, if only the right practical advice and support is put in place. We’d like to see the Government explore financial incentives, like export vouchers or export tax credits”.

Almost three-quarters of firms report “patchy” or no mobile internet coverage in their local area, a study has revealed. The research, published by the British Chambers of Commerce (BCC), urges the Government to supply companies with the “basic requirements” to run a business. While the issue was more widespread in countryside regions – with 90 per cent of firms reporting patchy signal – the problem was equally as apparent in cities, with 56 per cent complaining of poor signal. Across all respondents, a third said their mobile connection was “generally unreliable”. It further found that 42 per cent were unable to access 4G – the fastest mobile connection speed. Dr Adam Marshall, director general of the BCC, said: “Time and again, I hear from frustrated businesspeople who can’t use their mobiles or access the internet when they need to. “These are basic requirements for companies to work on the move, trade online, and connect with customers and suppliers.” He said “not spots” – a play on highly connected internet hotspots – were prevalent across the UK, even in the City of London. Earlier this year, Ofcom said all UK premises must receive a 4G signal by the end of 2017. A spokesperson for Ofcom said: “We agree that mobile coverage must improve and understand the importance of having reliable mobile broadband, wherever people live and work. “Ofcom rules mean that virtually all UK premises must receive a 4G signal by the end of this year. “We’re also making available valuable new airwaves to boost mobile broadband, and have challenged mobile operators to explore how to reach all remote areas and transport lines.” The BCC added that planning restrictions should be relaxed so taller mobile phone masts could be built, and said Ofcom should do more to hold providers to promises made about coverage in advertising.

Almost three-quarters of firms report “patchy” or no mobile internet coverage in their local area, a study has revealed. Read more