having multiple ebay business accounts?

[jetmax]

Hi all, so a question. I have a business ebay, and its in good standing for now, no issues, however I do not want to register for vat. I would rather open another business account and ltd company, and splitting sales between the two so theres no chance of reaching the threshold. I was wondering are there any implications of doing so?

[Nimble]

Honestly mate, I strongly advise against going down this route. It’s a super common thought when you're nearing the threshold, but it’s a massive trap for a few reasons.

First off, what you’re planning is legally known by HMRC as 'artificial separation' (or disaggregation). HMRC is completely wise to this. If both LTDs have the same director, sell similar items, or use the same address/warehouse, HMRC will just look right through the second company and treat them as one single business.

If they catch you doing this, they will backdate your VAT registration to the exact day your combined sales hit the threshold. You’ll be liable to pay all that backdated VAT out of your own pocket, plus hefty fines and interest. It can literally bankrupt you.

Also, remember the new DAC7 rules that kicked in at the start of 2024. eBay now automatically reports all seller income, bank details directly to HMRC. Their automated systems will cross-reference and flag two companies with the same director or address almost instantly.

Even from a purely eBay perspective, they will link the two accounts unless you're very careful (via IP, address, bank, name, etc.). If one account catches a suspension, they’ll likely nuke both of them overnight.

Plus, running two LTDs means double the accountancy fees, double the bookkeeping, and splitting all your inventory. The money you think you're saving on VAT usually just goes to your accountant anyway.

Bite the bullet and speak to an accountant. If your margins are tight, definitely look into the VAT Flat Rate Scheme, but trying to outsmart HMRC with artificial separation just isn't worth the stress or the risk to your business.

I would recommend setting up a stealth account or purchase from one of the sellers here.

[agent006140]

eBay now automatically reports all seller income, bank details directly to HMRC.
----
Does Ebay really report the bank details in UK??
Ebay has no business disclosing which bank you use to receive Ebay fund.

[rsot]

Originally Posted by jetmax

Hi all, so a question. I have a business ebay, and its in good standing for now, no issues, however I do not want to register for vat. I would rather open another business account and ltd company, and splitting sales between the two so theres no chance of reaching the threshold. I was wondering are there any implications of doing so?

What's your volume of sales/gross revenue per month?

[jetmax]

what if the directors are different or there is some separation in businesses, eg one does laptops and another does cameras?

[rsot]

Originally Posted by jetmax

what if the directors are different or there is some separation in businesses, eg one does laptops and another does cameras?

Same VAT number would be the kicker link I figure...

[james_112233]

Originally Posted by rsot

Same VAT number would be the kicker link I figure...

There would be no vat number, that's the whole point of his question lol.

If the business is owned by somebody else and it's selling different items and registered at a different trading address how can it be an issue ?

Question is do you have family or friends willing to let you use their details and essentially become a business owner with all the responsibilities that come with that while you do all the work.

[james_112233]

Originally Posted by Nimble

Honestly mate, I strongly advise against going down this route. It’s a super common thought when you're nearing the threshold, but it’s a massive trap for a few reasons.

First off, what you’re planning is legally known by HMRC as 'artificial separation' (or disaggregation). HMRC is completely wise to this. If both LTDs have the same director, sell similar items, or use the same address/warehouse, HMRC will just look right through the second company and treat them as one single business.

If they catch you doing this, they will backdate your VAT registration to the exact day your combined sales hit the threshold. You’ll be liable to pay all that backdated VAT out of your own pocket, plus hefty fines and interest. It can literally bankrupt you.

Also, remember the new DAC7 rules that kicked in at the start of 2024. eBay now automatically reports all seller income, bank details directly to HMRC. Their automated systems will cross-reference and flag two companies with the same director or address almost instantly.

Even from a purely eBay perspective, they will link the two accounts unless you're very careful (via IP, address, bank, name, etc.). If one account catches a suspension, they’ll likely nuke both of them overnight.

Plus, running two LTDs means double the accountancy fees, double the bookkeeping, and splitting all your inventory. The money you think you're saving on VAT usually just goes to your accountant anyway.

Bite the bullet and speak to an accountant. If your margins are tight, definitely look into the VAT Flat Rate Scheme, but trying to outsmart HMRC with artificial separation just isn't worth the stress or the risk to your business.

I would recommend setting up a stealth account or purchase from one of the sellers here.

Very soon we will have to do quarterly returns anyway even if your not vat registered and operate under a ltd.

[rsot]

Originally Posted by james_112233

There would be no vat number, that's the whole point of his question lol.

If the business is owned by somebody else and it's selling different items and registered at a different trading address how can it be an issue ?

Question is do you have family or friends willing to let you use their details and essentially become a business owner with all the responsibilities that come with that while you do all the work.

True point - I had a read he didnt want to register <another> VAT, my bad

[vettefever17]

From my understanding, VAT is customer-based. First off, I'm surprised eBay UK doesn't collect it automatically, but even if it is a business responsibility, why would you want to avoid it? It is no true distress to your own financial means unless you are tempted to dip into that pool, that is.

[Nimble]

Originally Posted by agent006140

eBay now automatically reports all seller income, bank details directly to HMRC.
----
Does Ebay really report the bank details in UK??
Ebay has no business disclosing which bank you use to receive Ebay fund.

Actually, as of recently eBay has no choice in the matter, it is quite literally the law.

It feels like an invasion of privacy, but it’s not eBay deciding to be nosey. On January 1, 2024, the UK government officially implemented the new DAC7 digital platform reporting rules (based on OECD global standards).

Under these regulations, platforms like eBay, Amazon, Etsy, and Vinted are legally mandated to collect and automatically report their sellers data directly to HMRC. The law explicitly requires them to hand over:

Your name, address, and Date of Birth

Your National Insurance number or Tax ID

Your total income and platform fees

The exact bank account number and sort code where the funds were sent

If eBay (or any other platform) refuses to report the specific bank details tying the seller to the money, the platform itself faces massive legal penalties. So while it definitely feels intrusive, they are doing it because HMRC forces them to.

[Nimble]

Originally Posted by jetmax

what if the directors are different or there is some separation in businesses, eg one does laptops and another does cameras?

If the directors are different, and the companies can't be linked, then it is fine. But remember, eBay will report the yearly earnings every January to HMRC.

[ft16]

Originally Posted by vettefever17

From my understanding, VAT is customer-based. First off, I'm surprised eBay UK doesn't collect it automatically, but even if it is a business responsibility, why would you want to avoid it? It is no true distress to your own financial means unless you are tempted to dip into that pool, that is.

It's not a business responsibility if your turnover is less than £90k GBP. As soon as you hit £90k and have to start charging VAT, you need to sell more to make the same amount of profit. There are a lot of variables depending on your business, margins, and what you sell, and crucially if your customers are VAT registered businesses or consumers, but you'd probably have to increase turnover by £10k minimum. For some people that might be easy; for others, the growth might be impossible making it better to stay just under the limit..

There's also a lot of extra administration, and you become an unpaid tax collector for the government.