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VAT Liability for Ebay/AMZN Arbitrage

Discussion in 'Business & Tax Advice' started by password01, Oct 29, 2015.

  1. password01

    password01 Regular Member

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    Hi There,

    Does anybody know if you are liable to pay VAT when selling items on eBay and dropshipping from Amazon?

    Thanks
     
  2. islandman1010

    islandman1010 Elite Member

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    If you would have a turnover over the VAT limit then the answer would be yes. Arbitrage or not doesn't matter. I think the turnover is £79,000 this year so if your sales on EBAY are greater than that then you are supposed to register. Arbitrage is just a fancy word for buying and selling.
     
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  3. password01

    password01 Regular Member

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    Yea I figured arbitrage was neither hear nor there for the tax man.

    Am I right in saying VAT would really corrupt the model of arbitrage...?

    Can you use multiple companies and stay under the threshold?
     
  4. islandman1010

    islandman1010 Elite Member

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    Arbitrage is really no different to me going to the cash and carry and then selling those goods on the market stall. You would pay the VAT of the profit part so if the margins are small then it's possible that it could be quite a dent. It's up to the individual to register for VAT and I am sure that not everyone does that should do. The only way to stay under the threshold either with one company or many companies is to have a turnover less than £79,000 of them all combined. I don't believe that any of the companies are required to report anything to the VAT man about your turnover. Also don't forget that some of the items might not have VAT applied to them so they wouldn't form part of the turnover.
     
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  5. password01

    password01 Regular Member

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    Ok thanks.

    I'll look into it further but if I meet thresholds I'll be reporting and registering.

    The VAT man is one man you absolutely do not want to get on the wrong side of. I guess you know that, being knowledgable on VAT etc.

    Lot's of people don't care about that until it's too late.

    Cheers.