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

[Dinky]

Hello

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

Thank you

 

[Mr D]

Hello

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

Thank you

Have you been charged vat on them?

 

[Dinky]

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?

 

[LPB 123]

VAT exempt like bank fees

 

[Dinky]

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.

 

[ecommerce84]

‘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.

 

[Dinky]

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.