eBay UK VAT crackdown??

[SS1]

Hey guys,

I have read about laws changing regarding VAT and eBay starting to crack down on sellers who are not VAT-registered. Basically the new laws say that UK market places will be held responsible for tax avoiding sellers. Therefore this gives an incentive for eBay to ban foreign sellers who are not registered for VAT. As we know the threshold is £83k/per year for those based in the UK, but for those abroad it's 0 so essentially they should register for VAT starting from their first sale.

I am a dropshipper with an offshore company living far away from the UK. This business is not really viable if have to pay VAT, as it's a high revenue low profit margin business + not all of my suppliers are VAT-registered.

Does anyone have experience of this? So far I've heard one seller getting a warning from eBay to register for VAT or have is account shut down in 30 days.

Now of course the real solution for this is to operate 10-15 UK-registered stealth accounts each making under £83k in revenue per year, so in total you can still process over £1m per year without paying VAT .

[blueuk]

Don't think you're going to get any help here from UK people who pay VAT & taxes.

If your business isn't viable with VAT the business isn't viable and you should go get a day job and PAYE.

[wired]

Originally Posted by SS1

Hey guys,

I have read about laws changing regarding VAT and eBay starting to crack down on sellers who are not VAT-registered. Basically the new laws say that UK market places will be held responsible for tax avoiding sellers. Therefore this gives an incentive for eBay to ban foreign sellers who are not registered for VAT. As we know the threshold is £83k/per year for those based in the UK, but for those abroad it's 0 so essentially they should register for VAT starting from their first sale.

I am a dropshipper with an offshore company living far away from the UK. This business is not really viable if have to pay VAT, as it's a high revenue low profit margin business + not all of my suppliers are VAT-registered.

Does anyone have experience of this? So far I've heard one seller getting a warning from eBay to register for VAT or have is account shut down in 30 days.

Now of course the real solution for this is to operate 10-15 UK-registered stealth accounts each making under £83k in revenue per year, so in total you can still process over £1m per year without paying VAT .

How about you sell in your own country and stop making your money from ours whilst avoiding paying your dues.

[Kiroshi]

I concur, wrong place to ask for help. How about you pay taxes if you are leaching out of our economy?

No one here supports tax fraud.

[loveblackmetal]

So everyone is paying taxes from their stealth accounts ? Give me a break. Don't be keyboard patriots.

[SS1]

First of all I asked for experiences about VAT and eBay, not for methods how to evade taxes. I am simply curious whether eBay has forced anyone to register for VAT? This is so I can take the appropriate measures in the future, possibly register for VAT or start using suppliers outside the UK.

I'm quite suprised that people here would be so much for paying all taxes but happy to fraud eBay and PayPal with ⊗⊗⊗⊗ documents etc. But don't get me wrong, I also understand how you feel if you are based in the UK and paying all taxes, but competing against foreign sellers who don't.

From my personal views, I pay taxes to the country where I live. When I used to live in the UK I paid all my taxes as I should. But now not living there, doesn't make sense to pay taxes somewhere where I don't get anything in return.. Anyways a bit off topic.

[wired]

Originally Posted by SS1

From my personal views, I pay taxes to the country where I live. When I used to live in the UK I paid all my taxes as I should. But now not living there, doesn't make sense to pay taxes somewhere where I don't get anything in return.. Anyways a bit off topic.

Erm, you are making money off our economy, so you pay your taxes for doing so, call it a 'fee' or a 'duty'. Without us, you would be skint and poor. Think about it.

[AK81]

Originally Posted by wired

Erm, you are making money off our economy, so you pay your taxes for doing so, call it a 'fee' or a 'duty'. Without us, you would be skint and poor. Think about it.

wired is right here.

[wired]

Originally Posted by AK81

wired is right here.

WIRED is always right.

[SpaceZ]

First and foremost, the right thing to do is pay taxes.

But then this raises the question of stealth accounts.

No body is paying their taxes using their stealth accounts-- not one-- not a single person on this forum.

Yet strangely they are exonerated but the OP isn't?

For some sellers, the purpose of multiple stealth accounts is not only to spread the risk but to actually avoid paying taxes.

If you are going to make a rule, then apply it on everyone. British and non-British alike.

PS: Sorry, just realised it's an old post.

[537465616c7468]

Originally Posted by SpaceZ

First and foremost, the right thing to do is pay taxes.

But then this raises the question of stealth accounts.

No body is paying their taxes using their stealth accounts-- not one-- not a single person on this forum.

Yet strangely they are exonerated but the OP isn't?

For some sellers, the purpose of multiple stealth accounts is not only to spread the risk but to actually avoid paying taxes.

If you are going to make a rule, then apply it on everyone. British and non-British alike.

PS: Sorry, just realised it's an old post.

i use stealth accounts but i pay my taxes on every single item i sell.

for me each stealth account is just another selling channel for a different product line and it allows me to sell a lot more than i could without them

its not an excuse for me not to pay my taxes .

Regards the op's post , i think if you not VAT Registered (sole trader) you will be asked for your UTR (unique tax return) number, which is quite worrying from a stealth point of view.

[blobby]

Originally Posted by SpaceZ

No body is paying their taxes using their stealth accounts-- not one-- not a single person on this forum.

Yet strangely they are exonerated but the OP isn't?

And who the hell are you to tell me and others we are liars and we don't pay taxes?

I pay mine thank you very much.

HMRC are one of nastiest bunch in the world to have come after you, it simply is not worth the grief.

[SpaceZ]

So you pay your taxes using stealth information provided to HMRC?

Give me a break. Who are you trying to fool?

[537465616c7468]

if you are selling goods to make profit , if you meet the threshold or not, You are still supposed to submit all your information to the tax man and if you are not your breaking that law, Simple.

also i think you need to do some (a lot) of home work on what you are allowed to submit or not .

for example, as far as a tax man/woman is concerned, you could have 50 ebay accounts in what ever name you wanted, it was created with stealth info or not, the point they give a dam about is the TAX Your paying on those sales .

and yes, all my invoices i submit are in the details i create for that pp account, so i submit many invoices in many details and whats more i download them all from paypal

it is not against the law to create a stealth account (might be against ebay and pp rules) but you are not breaking the law in the u.k

it is however against the law not to declare what your selling if you intend to make a profit .

[SpaceZ]

Thank you for your response.

Say someone has one or multiple stealth accounts registered on names they randomly concocted and then reached their PayPal receiving limit, they would be required to provide a photo ID and proof of address.

Now say this person provides them with the information they need by submitting official documentation like a passport and driver's license based on names they fabricated, can you explain a legal way of doing this in this exact scenario?

Moving on, let's say that person has done all of that and has been selling for a few months with high selling limits on multiple accounts, I found it hard to understand how someone would be able to morally justify breaking the law from one angle, by uploading documentation based on concocted information, and then feel morally obliged to report each and every sale in order to pay taxes.

I do understand that one has to register as Self Employed with HMRC and then submit tax returns annually. Thank you for explaining how you did this yourself.

But this also explains why people would feel the need to report their sales on stealth accounts. Say, a person was legally registered as Self Employed, and was then seeking to claim some sort of government scheme or benefit based on low income. I would understand why this person would need to back up their claims that they sell X and X on X and X trading site for X and X amount. An accountant (or they themselves) would simply collate their invoices together, from multiple stealth accounts, and submit a total gross and net income to HMRC.

This would prove that they are in work and would back their claims in respect to what they sell and for how much including expenses which they will provide separately.

The question is, what if you are not a Sole Trader, and predominately use eBay to buy, occasionally selling things for profit, without being registered as a business seller? It is really astonishing that I still have to report this to HMRC even though I am working full time on the side.

[blobby]

Originally Posted by SpaceZ

The question is, what if you are not a Sole Trader, and predominately use eBay to buy, occasionally selling things for profit, without being registered as a business seller?

If you are buying items to sell for profit, then by definition you are self employed and should register as a sole trader. You have 3 months from your first day to do so.

Originally Posted by SpaceZ

It is really astonishing that I still have to report this to HMRC even though I am working full time on the side.

Welcome to the real world, where people pay tax on what they earn. Time you signed up to not being a tax dodger.

[SpaceZ]

I have looked in to this. You are wrong.

If you are buying items to sell for profit, on a regular bases with transactions being carried out in a way that resembles shops and real businesses, then you have to declare your sales. The taxman will consider you a business seller even if you refuse to accept yourself as one.

Most of us have learned good manners and argue points with clarity, respect, while keeping good faith with others. Every now and then we come across members who are haughty and arrogant and refuse to back down, while staying logged in only to refute targeted members.

Anyway, apparently there is more to this than most people know. There are around 9 "badges of trade" and if someone meets even one of them, they have to declare their sales to the taxman. I have not copied and pasted them here as it will make this reply very long but they can easily be searched online.

[oompaloompa]

space, mentioned they do not meet the threshold, is that your only income? well in that case then there is no tax to pay, but you are still meant to declare it.....not sure of consequences if there is no tax to pay, only ever heard of fines plus having to pay the taxes owed...obviously big evasions are more serious........dont know...I suppose the consequences are what matter....

as for being stealth, this does not mean that money is not going in to your banks accs....banks reporting, and also people you know dropping you in it are a couple of ways taxman can find out.....

I do think some stealthers are genuinely scared of opening a can of worms by declaring an income however small, given that they think further questions might get asked on the 'grey area' of stealth registration....

[SpaceZ]

To Oompaloompa,

Yes, this is also something that has crossed my mind.

If HMRC were to see regular payments being made in to a bank account, they would probably want to see where that money is coming from. Seeing as that money will be from PayPal, they can easily trace it back and request additional information from PayPal directly.

They could probably feel that you haven't declared enough, and maybe there are a few hundreds of pounds still sitting in PayPal that haven't been withdrawn yet.

Now imagine PayPal complying with a government body and showing them the documents you have uploaded. Some people are even submitting Council Tax bills. In fact, it goes further; some have even uploaded passports.

Commenting even further to that "grey area" you mentioned: When the recently fired FBI Director, James Comey had his hearing, he said when the FBI investigate a case and start tapping in to it, they usually come across all sorts of other discrepancies and illegal activities that can be used against the suspect.

I can understand why some stealthers would be scared.

[wired]

'Blobby' (who himself has been here less than a year) and his anger issues, comical, must be a riot to live with!

'Pass the salt dear?'
'OMG how dare you, I do not wish to pass the salt!, I am alpha male, *beats chest* RAR'

LMAO

Spacez - there are literally loads of legal grey areas that you, we, are crossing when going Stealth. The sellers in the marketplace commit serious fraud crimes everyday, there is no denying anything of what we do.

Getting scared/living scared is part of the game unfortunately.

[wired]

Originally Posted by oompaloompa

space, mentioned they do not meet the threshold, is that your only income? well in that case then there is no tax to pay, but you are still meant to declare it.....not sure of consequences if there is no tax to pay, only ever heard of fines plus having to pay the taxes owed...obviously big evasions are more serious........dont know...I suppose the consequences are what matter....

as for being stealth, this does not mean that money is not going in to your banks accs....banks reporting, and also people you know dropping you in it are a couple of ways taxman can find out.....

I do think some stealthers are genuinely scared of opening a can of worms by declaring an income however small, given that they think further questions might get asked on the 'grey area' of stealth registration....

You're right on this. ITs actually easier and less stressful not to open the books to the HMRC, because once you're on their computers, they will come after you for compliance and make your life as difficult as possible.

As we've seen with one member of the forum who has been compliance checked, they do investigate how you have different ebay accounts under different names. I think once they actually cotton on to it all, only take a bright spark in the HMRC to put it all together and have more resources, there will be more being investigated and the lid will be lifted finally.

[wired]

I see Blobby is not logged in currently.

So much for that 'I stay logged in 24 hrs a day muppet, if you had been here longer than 5 minutes, you would know that.'