eBay requiring VAT registeration

[Lampre92]

Hi all, eBay statistics show the business has turned over more than £85,000 in the past 12 months so eBay are forcing me to provide VAT information however the business was operated under self employment up until £80,000 turn over and then switched to a LTD company which then (according to accountants) technically resets the VAT threshold. Because of this we don't have to register just yet but eBay won't let me use the platform without providing VAT details.

I have tried to explain the above to them but having no joy at all. Has anyone dealt with similar before and can advise?

 

[WebDesires]

PAY YOUR VAT.

Nah joking, but seriously your only option is to contact eBay, if they wont have any of it you need to register for VAT - its that simple.

 

[japancool]

If it's a new business (which, technically, it is), then it needs a new ebay account.

 

[WebDesires]

If it's a new business (which, technically, it is), then it needs a new ebay account.

Dont listen. This is TERRIBLE ADVICE. eBay have rules AGAINST multiple accounts, you will get in serious trouble.

Are there circumstances when creating another account isn't allowed?​

Registering new accounts to avoid buying and selling restrictions or limits, or other policy consequences, is not allowed on eBay.

Using multiple accounts policy

We understand that eBay members might want different accounts for buying or selling, or to focus on different product lines.

www.ebay.co.uk

You will get BOTH accounts suspended within short time.

 

[japancool]

Dont listen. This is TERRIBLE ADVICE. eBay have rules AGAINST multiple accounts, you will get in serious trouble.

He's not using it to avoid a restriction. A new limited company is a new legal entity.

If he's worried about that, he can clear it with their customer service team first.

 

[WebDesires]

Registering new accounts to avoid buying and selling restrictions or limits, or other policy consequences, is not allowed on eBay.

So your saying eBay would not consider it "avoiding buying and selling restrictions or limits" - "or other policy consequences".

I believe he is under restriction right now, ie. needs to supply a VAT number to continue selling. if not its definately covered under "other policy consequences".

Playing a dangerous game either way...

 

[japancool]

So your saying eBay would not consider it "avoiding buying and selling restrictions or limits" - "or other policy consequences".

Why should they? It's a completely new legal entity and as such, has its own legal trading limits. HMRC do not require the company to register for VAT. It does not inherit the trading history of the sole tradership.

Like I said, if he's concerned by ebay's policies, he can clear it with them first.

 

[Solve My Problem]

eBay are highly unlikely to allow the account to change.

A sole trader and a limited company are two separate entities. An eBay account cannot be transferred from one to the other without their express permission. Any sales or purchases you make whilst the account has you - as a sole trader.

There is very little flexibility when it comes to the likes of Amazon & eBay.

 

[fisicx]

You can have a personal account and a business account.

The business account can be for a sole trader, limited company or a world wide corporation. eBay makes no distinction. Switching from sole trader to Ltd doesn't reset anything.

@Lampre92 - Register and pay your VAT.

 

[WaveJumper]

Agree with above keep it simple and register and pay your VAT. Are you concerned by any chance that charging VAT on your sales is going to make your items less attractive to potential buyers

 

[Lampre92]

You can have a personal account and a business account.

The business account can be for a sole trader, limited company or a world wide corporation. eBay makes no distinction. Switching from sole trader to Ltd doesn't reset anything.

@Lampre92 - Register and pay your VAT.

Why is your advice to register and pay VAT? When it becomes a LTD company it becomes a new legal entity meaning the vat threshold technically resets?

Agree with above keep it simple and register and pay your VAT. Are you concerned by any chance that charging VAT on your sales is going to make your items less attractive to potential buyers

Of course I will register for VAT when legally required to do so, if I can turn over another £85k without paying VAT why wouldn't I?

Yes I am worried about VAT because it's an ecommerce business I cannot add VAT to the price as it would mean we are no longer competetive however it's a cost we will and can soak up.

Thanks for the help finally got through to someone in the UK after an hour and they sorted it.

 

[Chris Ashdown]

I assume you just continued using the old account and told them it was new a Ltd company that owned it. so to them its a continuation and the history goes with it
Nothing stopping you closing down the old account and starting a new company one

 

[Gecko001]

Why is your advice to register and pay VAT? When it becomes a LTD company it becomes a new legal entity meaning the vat threshold technically resets?



Of course I will register for VAT when legally required to do so, if I can turn over another £85k without paying VAT why wouldn't I?

Yes I am worried about VAT because it's an ecommerce business I cannot add VAT to the price as it would mean we are no longer competetive however it's a cost we will and can soak up.

Thanks for the help finally got through to someone in the UK after an hour and they sorted it.

And how what did Ebay finally do? We can only assume that they insisted on you registering for VAT.

 

[Lampre92]

And how what did Ebay finally do? We can only assume that they insisted on you registering for VAT.

I finally got through to an Irish call center who were willing to temporarily "unlock" the account on the condition I email in paperwork of the new LTD however the restriction never got removed and have since spoken to the same call center who say the previous person I spoke to was incorrect and it is impossible to remove this restriction without an exemption letter OR a valid VAT registeration number.

Legally I don't have to register for VAT until the LTD turns over £85,000 but understandably eBay have a responsibility to ensure everything is above board and I suppose it's a complex situation where they can't actually verify the details.

I have gone ahead and registered for VAT, it's fustrating to have to register 3 months earlier than I legally have to but it's easier than going down the new eBay account route and losing all of our listings / history.

Thanks for the responses.

 

[Solve My Problem]

I have gone ahead and registered for VAT, it's fustrating to have to register 3 months earlier than I legally have to but it's easier than going down the new eBay account route and losing all of our listings / history.

Thanks for the responses.

I assume you have registered as you and not the LTD company? Because that may cause you an issue if not as the ebay account is in your name

 

[Lampre92]

I assume you have registered as you and not the LTD company? Because that may cause you an issue if not as the ebay account is in your name

I have registered as the LTD as the eBay account is a business account?

 

[Solve My Problem]

I have registered as the LTD as the eBay account is a business account?

The problem is if the eBay account isn't in the business name, it could throw a curve ball.

Just something to watch out for, you have already seen how inflexible they can be

Darren

 

[Lampre92]

The problem is if the eBay account isn't in the business name, it could throw a curve ball.

Just something to watch out for, you have already seen how inflexible they can be

Darren

I really don't need anything else to go wrong lol! I have a manufacturing defect with 1 product and need to set the quantity to 0, this isn't possible as I'm not VAT registered (???) so I called eBay and the British lady I spoke to was amazed my listings are even still live so she told me to expect them to disappear / end in the next 24 hours. All while my VAT number could take 30 days to arrive!!!

 

[Solve My Problem]

They will validate the VAT number and if it doesn't match the account name they are likely to refuse it.

That would be my worry.

Darren

 

[Lampre92]

They will validate the VAT number and if it doesn't match the account name they are likely to refuse it.

That would be my worry.

Darren

When going through the process it required a lot of information about me address history, name ect and then went on to attach the company to the application so I'm really hoping it goes smooth.

 

[Solve My Problem]

I honestly don't know for sure but I suspect they have a system similar to

Check a UK VAT number

Check a UK VAT registration number is valid. Prove when you checked a number.

www.gov.uk

If you enter GB100116692 you can see all you get is the company name, a limited company and you are two different legal entities

Just be prepared they may not accept it

Darren

 

[japancool]

I assume you've correctly accounted for the transfer of stock from yourself to your limited company so you can claim back the VAT you paid for the stock you currently hold?

 

[Lampre92]

I assume you've correctly accounted for the transfer of stock from yourself to your limited company so you can claim back the VAT you paid for the stock you currently hold?

To be frank no, I haven't. I've been self employed for a while and always done my own self assessment but this new business venture has turned over far more than I used to so I finally got an accountants (very expenspve - £300/m) so I am hoping they sort most of it for me but I will bring this up to them. Thanks

 

[paulears]

The thing that ebay will no doubt stick to, is if you are intending to trade with them under a new 'ownership' They would be happy you starting a new account with the new ltd company name - I doubt you'll get them to accept the same ebay seller name with the change to a Ltd company.

 

[Lampre92]

The thing that ebay will no doubt stick to, is if you are intending to trade with them under a new 'ownership' They would be happy you starting a new account with the new ltd company name - I doubt you'll get them to accept the same ebay seller name with the change to a Ltd company.

I don't think it will be an issue as everytime I explained the situation to the support reps they didn't seem to have an issue and I believe it's normal practise to start an eBay store as an individual and then if/when it takes off you then create a LTD company.

If you click any eBay listing listed by a "company" you will see many of them list something like this:
Director Name
Company Name
Company address

I'm confident that espect of it will be OK as I have friends who are sellers who have gone down similar routes to going from personal > business.

My main worry now is how long HMRC take to supply a VAT number but I can only sit tight and hope for the best!

 

[DontAsk]

I assume you've correctly accounted for the transfer of stock from yourself to your limited company so you can claim back the VAT you paid for the stock you currently hold?

Depeneding how old the stock is.

To be frank no, I haven't. finally got an accountants (very expenspve - £300/m)

If you have only recently crossed the VAT threshold then that sounds excessive. What are they doing for that? Bookkeeping? PAYE? Personal tax returns?

Based on what I pay for my turnover, £100/m would be nearer the mark.

I doubt you'll get them to accept the same ebay seller name with the change to a Ltd company.

I did it from sole trader to Ltd, although not VAT registered at the time. No problems.

Ebay's password policy on the other hand...

[edit] PS there's no where in the business information on Ebay, that I am presented with, to enter a VAT number [/edit]

 

[japancool]

Depeneding how old the stock is.

Let's assume the stock is less than 4 years old.

 

[antropy]

operated under self employment up until £80,000 turn over and then switched to a LTD company which then (according to accountants) technically resets the VAT thresholdhe above to them but having no joy at all. Has anyone dealt with similar before and can advise?

I'm not an accountant but that doesn't sound right to me. I'd double check with a different accountant tbh.

Paul.

 

[paulears]

One who doesn't charge crazy monthly fees too! Ebay use my VAT number - although I have no idea where I entered it.