Ebay VAT for a non uk sole trader

Hi there. I am a non resident operating a sole trader business from NZ through eBay (just started operating) dropshipping items from a supplier in the UK to mainly UK customers - ie the inventory is already onsite in the UK and held by the UK supplier. it is likely a few of my sales will be in the UK. These are all low value items under 100 pounds. The uk customers will purchase from my eBay store and I will send instructions to the UK supplier who packages and posts the items to uk customers. Note I will only be selling through eBay, From the eBay website it says that Ebay as the online market place collects the VAT and passes it to HRMC, and i can see that the VAT is included when I look at one of the invoices from my first sale. However eBay have confused me by then saying that I need to register for VAT and provide eBay with a VAT number as HRMC requires this. I am happy to comply but this feels like i would be returning VAT and doubling up on VAT when eBay as the online market place already collects the VAT? (or so I understand, but could be wrong?) So my main question is am I supposed to register for VAT as a non resident UK individual in this situation or do I need to somehow register my details in another way with HRMC. Any advice appreciated, thanks

Hi,

If you are an overseas business and you are making sales of any value to a customer in the UK via a marketplace then it should be the responsibility of the marketplace to account for the VAT. You can see guidance below:

Goods in the UK at the point of sale — sold by an overseas seller through an online marketplace

There are 2 sales taking place in this scenario. The UK supplier is making a supply to you and you are then making a sale via the marketplace to the end customer. As per the guidance above, when you sell the goods to the end customer you are making a deemed supply zero rated supply to the marketplace. This will allow you to register for VAT and recover the VAT which you will be paying to the seller of the goods to you in the UK.

Thank you.

Hi There, thanks for your response. I have found out that the UK seller of the goods is not VAT registered (as their sales are well below the VAT threshold) Does that mean that me as a non resident making a deemed zero rated supply to the online market place, that I don't need to register for VAT, given that I won't be able to recover VAT from the non VAT registered UK seller? Or do I still need to register for VAT and submit zero rated VAT returns each quarter? Many Thanks

Hi can I get a reply to the above question please? Thanks

As you are non-UK resident, the VAT registration threshold is Nil, so the first sale you make triggers VAT registration, whereas the UK supplier can trade up to £85,000 before they need to register for VAT because they are, presumably, UK resident. So you still need to register for VAT because you are making a "sale" to eBay first. Zero rated sales are still seen as being subject to VAT even though the VAT is Nil, so zero rated sales count towards the VAT registration threshold and for you, being non-resident, the threshold is Nil. Yes, you would then submit VAT returns with no output tax (sales VAT) due to HMRC and no input tax (purchase VAT) either. In theory, you could register for VAT and at the same time, ask HMRC for "exception from registration", if HMRC agree they will write back to you confirming this, but that may not satisfy the online marketplace as that exception is conditional on you not making any standard rated sales so the marketplace may accept it initially but then may revisit in the future and request further proof on a regular basis.