I like looking at the Google search strings that have led people to TameBay: it’s interesting to watch the trends come and go, seeing WAGs hoodies replaced with Webkinz at the moment, for example. Then there are the questions that come up again and again, and I’m going to make a conscious effort to answer some of them. One common one that’s shown up again today is about VAT on Paypal fees. I see this question on the eBay boards too, typically “how do I find out the VAT element paid on my Paypal fees”.
The nice simple answer is that there *is* no VAT element paid on your Paypal fees. Financial services, including Paypal, are exempt from VAT, and therefore none is charged.
Don’t you wish all questions had such a straightforward answer 😀
2 Responses
Should you be paying PayPal fees on top of VAT? Because then PayPal is charging a commission on VAT, which is supposed to be collected by the shop. I wanted to know if it should be on the invoice price i.e ex vat price? The customer’s card etc should show the inc vat price.
It’s exactly the same as a bank charging fees inclusive of VAT for a merchant account. What the government collects from you in taxes has absolutely nothing to do with what another company charges you in services.