Are PayPal fees reverse charge, or simply non-VATable?

Discussion in 'Ecommerce Forum' started by Dinky, Aug 27, 2019.

  1. Dinky

    Dinky UKBF Newcomer Free Member

    19 1
    Hello

    Should PayPal fees be treated as reverse charge, or are they simply non-VATable?

    Thank you
     
    Posted: Aug 27, 2019 By: Dinky Member since: Jun 7, 2014
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    16,097 1,797
    Have you been charged vat on them?
     
    Posted: Aug 27, 2019 By: Mr D Member since: Feb 12, 2017
    #2
  3. Dinky

    Dinky UKBF Newcomer Free Member

    19 1
    No I have never been charged vat, however there is confusion on how these should be accounted for. As vat is not charged it suggested these are non-vatable, however one person on PayPal forum who had tax inspections said the taxman advised these need to be reversed charged, which just seems wrong to me.

    Does anyone have a definitive answer please? Has anyone receive the same advise from HMRC? For those that have used PayPal for years in your business, how have you accounted for the fees please?
     
    Last edited: Aug 28, 2019
    Posted: Aug 28, 2019 By: Dinky Member since: Jun 7, 2014
    #3
  4. Yellow Square Motor Parts

    Yellow Square Motor Parts UKBF Regular Free Member

    147 32
    VAT exempt like bank fees
     
    Posted: Aug 28, 2019 By: Yellow Square Motor Parts Member since: Sep 29, 2016
    #4
  5. Kavara

    Kavara UKBF Newcomer Free Member

    10 0
    You don't need to pay VAT on any services fees.
     
    Posted: Aug 28, 2019 By: Kavara Member since: Aug 23, 2019
    #5
  6. Dinky

    Dinky UKBF Newcomer Free Member

    19 1
    I agree with both of you and this is exactly what I thought until I read about person with the tax man explaining these should be reversed charged.
     
    Posted: Aug 29, 2019 By: Dinky Member since: Jun 7, 2014
    #6
  7. ecommerce84

    ecommerce84 UKBF Regular Free Member

    553 163
    ‘The taxman’ from HMRC has been known to get things wrong on many occasions.

    I am also of the opinion that they are exempt from VAT as opposed to reverse chargeable.

    You could ask HMRC themselves how they should be treated and I’d expect them to agree they are exempt - get the answer in writing in case you are ever inspected.
     
    Posted: Aug 31, 2019 By: ecommerce84 Member since: Feb 24, 2007
    #7
  8. Dinky

    Dinky UKBF Newcomer Free Member

    19 1
    That's the problem with HMRC though, you can make several calls and get several different answers, so I can't truth HMRC to even know their own rules. Like you say they get things wrong on many occasions, so you never really know where you stand.

    Would be good to hear from those that use PayPal and had tax inspection, and from any accountants for clarification please.
     
    Posted: Aug 31, 2019 By: Dinky Member since: Jun 7, 2014
    #8