eBay sellers, missing VAT invoices, VAT returns
Discussion
I buy a number of consumables and parts off eBay for my business, e.g. to keep the business vehicles in working order, or for small repairs and replacements where either you just want a specific part number from whoever is cheapest with P&P, or where a generic item will do fine.
Sellers advertise VAT registration numbers in the listing, often explicitly asserting that they "include VAT invoices with the goods". Of course when things turn up as often as not there's no paper in the box, jiffy bag, whatever.
Come VAT return time (as now), for any non-existent VAT invoices I print off the Paypal transaction, write on the vendor's address and VAT number as shown on ebay, and record the VAT element accordingly.
Would this stand up to a VAT inspection? If there is a mis-recording, is it me who is accounting for VAT without a formal VAT invoice from the vendor, or is it the vendor who is not providing VAT invoices when the sale is made? I don't believe it's for me to ascertain whether the vendor is correctly administering VAT on the sales they make, there needs to be an element of trust that they undertake their legal liabilities - they advertise as being VAT registered.
(I'm talking about UK businesses here. As an aside, my assumption is that the Chinese eBay vendors with non-UK addresses and GB VAT numbers are essentially fraudulent; are they really paying their VAT liabilities to HMRC and are HMRC equipped to pursue them? )
Sellers advertise VAT registration numbers in the listing, often explicitly asserting that they "include VAT invoices with the goods". Of course when things turn up as often as not there's no paper in the box, jiffy bag, whatever.
Come VAT return time (as now), for any non-existent VAT invoices I print off the Paypal transaction, write on the vendor's address and VAT number as shown on ebay, and record the VAT element accordingly.
Would this stand up to a VAT inspection? If there is a mis-recording, is it me who is accounting for VAT without a formal VAT invoice from the vendor, or is it the vendor who is not providing VAT invoices when the sale is made? I don't believe it's for me to ascertain whether the vendor is correctly administering VAT on the sales they make, there needs to be an element of trust that they undertake their legal liabilities - they advertise as being VAT registered.
(I'm talking about UK businesses here. As an aside, my assumption is that the Chinese eBay vendors with non-UK addresses and GB VAT numbers are essentially fraudulent; are they really paying their VAT liabilities to HMRC and are HMRC equipped to pursue them? )
I have the same with HSBC business account service charges. They send a monthly statement, with account costs, i.e. £5.50 monthly fee, but they state 'This is not a VAT invoice' Despite repeated requests, they won't issue VAT invoices! Obvs, the various bank charges and fees attract VAT.
I do same as you for these charges, and Amazon Business purchases where I often can't get a VAT invoice.
I guess in the event of a VAT inspection, the inspector will take a view on if these are reasonable. Ultimately it's down to the organisation submitting the return to demonstrate that VAT has actually been paid on these purchases.
I guess you check that the VAT numbers are real, and not made up?
I do same as you for these charges, and Amazon Business purchases where I often can't get a VAT invoice.
I guess in the event of a VAT inspection, the inspector will take a view on if these are reasonable. Ultimately it's down to the organisation submitting the return to demonstrate that VAT has actually been paid on these purchases.
I guess you check that the VAT numbers are real, and not made up?
catfood12 said:
I have the same with HSBC business account service charges. They send a monthly statement, with account costs, i.e. £5.50 monthly fee, but they state 'This is not a VAT invoice' Despite repeated requests, they won't issue VAT invoices! Obvs, the various bank charges and fees attract VAT.
I do same as you for these charges, and Amazon Business purchases where I often can't get a VAT invoice.
My understanding is that Bank charges do not attract VAT.I do same as you for these charges, and Amazon Business purchases where I often can't get a VAT invoice.
With Amazon Business I selected to only use businesses that make the VAT invoice available online, which you do via your dashboard.
As the OP says, ebay vendors can be time consuming. I do the same as the OP but I haven't had an inspection.
catfood12 said:
I have the same with HSBC business account service charges. They send a monthly statement, with account costs, i.e. £5.50 monthly fee, but they state 'This is not a VAT invoice' Despite repeated requests, they won't issue VAT invoices! Obvs, the various bank charges and fees attract VAT.
Are you sure these charges attract VAT? I am no VAT expert, but the "operation of any current, deposit or savings account" is exempt from VAT under the VAT Act 1994, Sch 9, Part II, Group 5, para 8.That would explain why your bank will not issue a VAT invoice.
If you have been calculating VAT on the account costs and including them in your VAT return you might want to rethink that....
catfood12 said:
They send a monthly statement, with account costs, i.e. £5.50 monthly fee, but they state 'This is not a VAT invoice' Despite repeated requests, they won't issue VAT invoices!
O2 do the same with phone bills, monthly bill showing all costs, VAT separately and their VAT no. etc. - appears to be a normal VAT invoice. Yet it states 'this is not a VAT invoice'. ?
danster72 said:
I buy a number of consumables and parts off eBay for my business, e.g. to keep the business vehicles in working order, or for small repairs and replacements where either you just want a specific part number from whoever is cheapest with P&P, or where a generic item will do fine.
Sellers advertise VAT registration numbers in the listing, often explicitly asserting that they "include VAT invoices with the goods". Of course when things turn up as often as not there's no paper in the box, jiffy bag, whatever.
Come VAT return time (as now), for any non-existent VAT invoices I print off the Paypal transaction, write on the vendor's address and VAT number as shown on ebay, and record the VAT element accordingly.
Would this stand up to a VAT inspection? If there is a mis-recording, is it me who is accounting for VAT without a formal VAT invoice from the vendor, or is it the vendor who is not providing VAT invoices when the sale is made? I don't believe it's for me to ascertain whether the vendor is correctly administering VAT on the sales they make, there needs to be an element of trust that they undertake their legal liabilities - they advertise as being VAT registered.
"Would this stand up to a VAT inspection?" - No. There are two separate issues. The supplier has an obligation to provide a VAT invoice if their customer is VAT registered. Separately the customer has an obligation to hold a VAT invoice if they want to recover the VAT.Sellers advertise VAT registration numbers in the listing, often explicitly asserting that they "include VAT invoices with the goods". Of course when things turn up as often as not there's no paper in the box, jiffy bag, whatever.
Come VAT return time (as now), for any non-existent VAT invoices I print off the Paypal transaction, write on the vendor's address and VAT number as shown on ebay, and record the VAT element accordingly.
Would this stand up to a VAT inspection? If there is a mis-recording, is it me who is accounting for VAT without a formal VAT invoice from the vendor, or is it the vendor who is not providing VAT invoices when the sale is made? I don't believe it's for me to ascertain whether the vendor is correctly administering VAT on the sales they make, there needs to be an element of trust that they undertake their legal liabilities - they advertise as being VAT registered.
If you haven't got a VAT invoice then the first thing HMRC will do is suggest you go back to the supplier to get one. If you have done due diligence - checked the VAT number belongs to the seller, etc. then HMRC might accept the alternative evidence you have in place of a VAT invoice.
danster72 said:
(I'm talking about UK businesses here. As an aside, my assumption is that the Chinese eBay vendors with non-UK addresses and GB VAT numbers are essentially fraudulent; are they really paying their VAT liabilities to HMRC and are HMRC equipped to pursue them? )
The VAT numbers will be genuine because prior to 1/1/21 eBay/Amazon could be held liable for the VAT if they were not. However the likelihood of the Chinese business actually paying over the VAT was zero. What on earth do you think HMRC could do to collect the VAT? Send bailiffs to Beijing. And if HMRC cancelled the VAT registration then it would just spring up again with a new name and register again.Which is why the rules have just changed from 1/1/21 and now eBay/Amazon or any other online marketplace has to collect the VAT and hand it over, and which is why you will see the prices have just risen by 20%.
PF62 said:
"Would this stand up to a VAT inspection?" - No. There are two separate issues. The supplier has an obligation to provide a VAT invoice if their customer is VAT registered. Separately the customer has an obligation to hold a VAT invoice if they want to recover the VAT.
If you haven't got a VAT invoice then the first thing HMRC will do is suggest you go back to the supplier to get one. If you have done due diligence - checked the VAT number belongs to the seller, etc. then HMRC might accept the alternative evidence you have in place of a VAT invoice.
OK, thanks, that makes sense. How much due diligence is one expected to do in practice for a one-off £10-£50 purchase, though, I wonder? If you haven't got a VAT invoice then the first thing HMRC will do is suggest you go back to the supplier to get one. If you have done due diligence - checked the VAT number belongs to the seller, etc. then HMRC might accept the alternative evidence you have in place of a VAT invoice.
The changes to eBay policy will only make a real difference for domestic traders if they follow through with a VAT invoice - eBay aren't going to be providing a VAT invoice even if they do force/persuade sellers to itemise VAT rates on their stock. The failure to provide a VAT invoice is so widespread that it feels like it needs to be a feedback item for any real change to take place.
Amazon on the other hand seem to have got a much tighter hold on what sellers are doing, offering you the ability to restrict business purchases to sellers providing downloadable VAT invoices.
Thanks for the prompt about checking VAT numbers, I wasn't aware of it. I've just run a dozen GB numbers through from my stack of ebay receipts and they all check out, so that looks promising.
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