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Posted Tue, 24 Oct 2023 21:17:49 GMT by
Hi there, this forum seems like a great resource... thanks HMRC! I have made an error on my part, and not entered my VAT number into my Etsy seller profile page on Etsy.com. As a result I've been charged tens of thousands of pounds of VAT over the last 2 years on my seller fees. So any fees charged for selling on etsy.com have had the 20% VAT applied to them. I've now entered my VAT number into Etsy, so I won't be charged moving forward as it's dealt with on a reverse charge basis.. but where does that leave me with all the VAT that I've paid to Etsy on my fees.... is it reclaimable or is it dead money? I sincerely hope that there's some way that I can get it back as it was paid in error. Advice online seems conflicting.. any ideas?
Posted Fri, 27 Oct 2023 07:35:20 GMT by HMRC Admin 25 Response
Hi fewleh,
The commission charged by Etsy was correctly charged due to to Etsy believing that you were not in business, hence the charge of VAT.
As you stated the VAT should have been subject to the reverse charge.
I would recommend contacting the marketplace and confirm that you were VAT registered during the time they were charging you VAT on the commission.
Although they are not obliged to amend the invoice they can amend this and subject the invoice to a reverse charge transaction which you can then use to submit your VAT return.
However if the marketplace refuse to amend the invoice then you would not be able to recover the VAT as input tax as it has been incorrectly charged to you. 
Please see the guidance below
Place of supply of services (VAT Notice 741A)
Thank you. 

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