Ebay, New Vat Rules. Paying Vat On Second Hand Items.

[flobadob]

I know that new VAT rules have been initiated across the EU and Britain since July 1st. But I noticed on Ebay that a seller I was looking to buy something from has said that VAT will be added to the final payment price.

This is a second hand item that I was thinking of purchasing. Obviously VAT was paid previously by the current owner, so can you apply VAT again on the same item?

[jno]

it might depend if the seller's VAT registered?

[Captain2]

I think jno is correct. If you watch programmes, such as Flog It, it always tells you the Auction House's (VAT Registered) buyer/seller fess, say 15% + 20% VAT.

[Buenchico]

The VAT at auction houses, Captain2, is only applied to the commission, not to the price of an item itself (unless that item is being sold on behalf of a VAT-registered business).

So, for example, a second hand item sold for £100 plus 15% commission and VAT will actually cost the buyer £100 + £15 + £3 (which is the VAT on £15) = £118.

A VAT-registered trader, who is offering second hand goods for sale (whether directly or through a third party, such an an auction site), is obliged to charge VAT on purchases unless that trader purchased the goods through a VAT margin scheme. The VAT margin scheme rules apply where the trader wouldn't have been able to reclaim VAT on his own purchase, such as when buying from a private individual or from a business that's not VAT-registered.

Confusing, ain't it?

https://blog.shorts.uk.com/vat-on-second-hand-goods

[Kathyan]

I sold a chair on ebay and had to pay VAT on the final valuation fee! I have stopped selling on ebay now, charges are too much.

[THECORBYLOON]

The way I read the guidance last night, the price requested is meant to include the VAT so that buyers are not expected to pay on top of the price shown.

[Buenchico]

^^^ 'Business to business' sellers are permitted to advertise non-VAT prices (because a VAT registered customer will be able to reclaim any VAT paid anyway).

Where sales are predominantly to the general public, traders are required by law to include VAT in the prices that they show.

That obviously leaves a few grey areas, as some businesses sell both to VAT-registered companies and to the general public. In such cases, they're meant to clearly show both prices.

[flobadob]

Hi Buen, thanks for clearing that up. Um, I think, lol.