Paypal and VAT

[Alimal456]

I've read conflicting advice on how I should handle Paypal fee's. Can someone clear this up for me ?

1, Is it Exempt or Outside the scope ??

2, General point Exempt is added to your VAT return but Outside the scope is not added, right ??

Thank you !

 

[lesvatadvice]

When PayPal deduct a charge from money handled on your behalf, that is a VAT exempt financial charge. It is included in the Box 7 inputs total.

 

[Alimal456]

Hmmm

And I always thought it was outside the scope of VAT ??? Anyone else ??

 

[tom1457]

As PayPal is based outside of the UK in Europe I have always treated them as being a supplier of services from the EU with 0% VAT

 

[scstock]

As PayPal is based outside of the UK in Europe I have always treated them as being a supplier of services from the EU with 0% VAT

That's what I do also, same with eBay.

 

[lesvatadvice]

But, if eBay are making a charge to you, that is not an exempt FS charge, but a taxable commission or admin charge. That would require you to account for VAT under Reverse Charge rules if you are VAT registered.