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

Posted Thu, 20 Jul 2023 10:44:04 GMT by
Hello I am VAT Reg. Sole Trader. I use Paypal to receive payment from my buyers. Paypal will deduct a fee called "PayPal fee". My question is: Should PayPal fees be treated as reverse charge, or are they simply non-VATable (Bank charges)? I am a bit confused as I am new to VAT. Please help. Thank you
HMRC Admin 19 Response
Posted Tue, 25 Jul 2023 07:59:24 GMT by HMRC Admin 19 Response
Hi,

You may want to confirm this with Pay Pal but if they are charging you a fee for a financial transaction it would generally be an exempt supply of finance and so would not be subject to the reverse charge

You can see guidance here:

VAT Notice 701/49: finance

Thank you.

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