PayPal double charge VAT on eBay

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Early on Friday morning sellers reported that . This appears to have affected many sellers both those who had already charged VAT had it charged again, and those who aren’t even registered to collect VAT still had VAT added.

Collecting VAT for non-VAT registered sellers is not only illegal but even for VAT registered sellers is against the new eBay VAT policy that went live on 20th February this year. The best advice for all sellers is to check payments received on Friday through PayPal and if VAT was added incorrectly to refund the over payment.

TameBay reader Simon who sells on eBay as told us “The main worry for me and other sellers was the loss of our high DSRs and/or feedback rating”. When a glitch like this results in overcharging customers sellers should refund as quickly as possibly, but Simon also advises stepping up communications to affected customers to assure them you’re aware of the problem and informing them of how you’re resolving it.

Potentially the biggest problem for sellers unaware of the problem will arise at a tax inspection when they discover that they’ve unwittingly double charged VAT. This will be a tough one to track back at some point in the future, especially as there has been no communication from eBay on the announcement board for future reference.

As of Friday evening it appears the glitch was resolved, so it’s just Friday’s payments that need to be verified.


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