Ebay Fees & VAT Confusion

OK, so we have an invoice for Ebay fees which has been paid. We are VAT registered and therefore Ebay has raised the invoice without the Luxembourg VAT.

My question is: What do I do with regards to the VAT? Do I mark it down as being out of scope of VAT or do I add the VAT as “EC VAT EXEMPTION” which adds the vat, then takes it off?

TBH any help would be great, as at the moment I’m not even sure if the fees are VAT applicable.

Thanks in advance!

Just set the purchase to 0% VAT.

Im not 100% sure though and I’m not an accountant!

Currently I’m not VAT registered so my ebay fees are net of VAT, but this is something that concerns me going forward because I’m basically going to have to register at the end of the month.

I actually expected that ebay would start to add VAT onto my invoice once I registered, does that not happen then?

I know there is VAT legislation about the supply of goods and services (ebay is services) in the EU where they charge VAT at the rate of the country in which the consumer lives and the consumer is supposed to reverse charge the VAT. It all seems complicated to me, and seems difficult to cope with in Quickfile but I’m sure there will be a way to do it correctly.

I’m dreading the hassle.

I’ve just read the knowledgebase article about the reverse charge or tax shift. I’m sure I’ve read before that quickfile is only set up to cope with the reverse charge mechanism regarding goods, however the article uses google adwords as an example which I would have thought would be digital services?

Would digital services supplied from the EU be accounted for in any way differently than goods supplied from the EU, that’s what I’m confused about?

At the moment QuickFile assumes EC reverse charge is for goods rather than services, however the VAT calculation will still be correct either way. There’s an example here on how you can adjust your VAT return for any services. In the future this will be something that we will automate.

That would be great Glenn when it’s automated.

I’ve looked at the example there and I think I understand what I’d need to do regarding ebay fees when I become VAT registered - although I really don’t like the idea of manually adjusting the boxes, so the sooner it’s automated the better for me.


So as far as i understand things…

box 1 is for the VAT on sales
box 2 is for VAT on acquisitions from EC states (i.e. £10 - 20% of box 9)
box 3 is these added together £185.00 (box 1 & 2 combined and is total VAT due)
box 4 is the VAT you paid on purch (i.e. £100.00 - VAT reclaimed from invoiced VAT amounts)
box 5 is the difference £85.00
box 6 is the total net sales £5,000.00
box 7 is the total net purch £5,000.00 (Which would include not include net EU costs)
box 8 is goods & supplies TO EU £0.00
box 9 is acquisition of goods & related costs to EU £50 (which is the net EU costs - i.e. ebay fees)

None of these boxes are specifically for EU “Services” as far as i can see?

The VAT return doesn’t include a dedicated box just for EC services or the reverse charge in general.

In the case where a business pays £100 in relation to an EC service.

  • On its VAT return, the business will include £20 of VAT in box 1 (standard UK rate 20%).
  • This would then get reclaimed again in box 4.
  • The £100 net expense then gets added to box 6 and box 7.