eBay’s UK tax bill is under scrutiny

No primary category set

According to accounts published on Friday, eBay in the UK has paid a weeny percentage in UK tax when compared to the revenues generated in the last tax year. eBay (UK) Ltd is reported to have paid £1.1m in tax in the UK on revenues of £1.1bn. (Cleverer people than me can calculate what that makes the total merchandise sales made via eBay over that period.)

But I bet there are more than a few UK eBay sellers, multi-channel merchants also using Amazon, who pay more than a million a year to HMRC.

You know how it’s done, from the details of your monthly eBay selling bill. Your fees are paid to eBay International AG and that’s based in Switzerland. You don’t pay eBay (UK) Ltd in Richmond.

We contacted eBay and received this comment: “In all countries and at all times, eBay is fully compliant with national, EU and international tax rules including those of the OECD.”

You can read the report in the Guardian here.

On one level, it’s surprising that to this point eBay’s tax affairs have not been subject to similar scrutiny experienced by Amazon, Starbucks, Google, Facebook and the like. And some of those firms have been called before the relevant House of Commons committee. Perhaps a similar interrogation awaits eBay.

On another level, the uproar that big firms take a lot out and put little in is entirely understandable. But equally the tax system in the UK allows them, quite easily, to funnel their earnings into tax efficient structures to limit their liability.

Every business should do that, as long as it’s all on the right side of the law and these approaches are legal it seems. Indeed, I’d go so far as to assert that a business has a commercial duty to exploit any clause or loophole that legally means they pay as little tax as is possible.

As we have said before: “they haven’t broken the law but the law may well be broken.” It’s just a shame, perhaps, that costs prohibit smaller business taking similar advantage owing to their scale. And it will be interesting to see how arrangements like this change after Brexit, currently scheduled for Spring 2019.

9 Responses

  1. Ebay made this change to have billing registered in Luxembourg years ago.

    So why has it taken so long for HMG to notice this?

    By the way, remember who Ebay will get the money from if they’re forced to pay more taxes!

  2. there just as bad as the chinese/uk sellers avoiding tax , HMRC need to get this whole online sales tax compliant from the top to the bottom

  3. Yes, it is wrong, but don’t blame Ebay. Blame our own tax laws that allow this. It is legal.

    It isn’t just a commercial duty, as you state. In the USA it is a fiduciary duty of company directors to ensure their company don’t unnecessarily pay money on tax, and I believe directors and companies can be sued for not doing this.

  4. I queried eBays VAT status when they moved to Luxembourg, OK it only affects VAT registered sellers and eBay fees, but seeing that eBay would not raise the fees, I would rather claim back 20% of the fee total rather than the 15% (I think it is) of the current VAT refund,

    Yes, eBay would be liable for 20% VAT paid to the UK and not 15% paid to Luxembourg!


UK Plastic Packaging Tax rate increase from 1st April

UK Plastic Packaging Tax rate increase from 1st April

National Insurance cut to impact January pay cheques

National Insurance cut to impact January pay cheques

2024 US Tax Policy Predictions with Scott Peterson, Avalara

2024 US Tax Policy Predictions with Scott Peterson, Avalara

2023 Ecommerce World Review - March 28/29

Save the date: 2023 Ecommerce World Review

2023 accounting and tax changes from HMRC

2023 accounting and tax changes from HMRC

ChannelX Guide...

Featured in this article from the ChannelX Guide – companies that can help you grow and manage your business.


Take a look through a selection of the latest articles on ChannelX

Register for Newsletter

Receive 5 newsletters per week

Gain access to all research

Be notified of upcoming events and webinars