eBay will NOT pass UK Digital Services Tax to SMEs

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eBay have announced this afternoon that they will pay the UK Digital Services Tax which the government is levying on large internet based businesses. Unlike some other marketplaces, eBay will not pass the UK Digital Services Tax to sellers in the form of fee increases.

This is fantastic news and it’s also the honourable thing to do. The tax was never intended to apply to UK SMEs and indeed was intended for businesses, who while they’ve always paid the tax due under UK law, have been perceived not to be paying their fair share. It’s a response to businesses which are domiciled overseas and the UK Government described this as a misalignment between the place where profits are taxed and the place where value is created. In order to redress the balance a little the 2% UK Digital Services Tax is being levied on search engines, social media services and online marketplaces which derive value from UK users effective the 1st of April 2020.

“Under the current international tax framework, the value businesses derive from user participation is not taken into account when allocating the profits of business between different countries. This measure will ensure the large multinational businesses in-scope make a fair contribution to supporting vital public services.”
– HM Revenue & Customs

With many businesses facing costs from ever increasing competition, the UK exit from the EU and on top of that the Coronavirus pandemic, the last thing anyone wants is to see their marketplace invoice have 2% tacked on in tax that was never intended to be imposed on UK SMEs.

We (and you) often complain about eBay so we want to say right here that we’re dead impressed that they’ve taken the decision to do the right thing and cover the tax themselves in the manner it was intended to be applied and not copy competitors by passing it on to you.

“eBay is one of the marketplaces which will have to pay the new tax – and a lot of you have asked whether we at eBay will be passing on this tax to our sellers in the form of new fees.
 
We wanted to reassure you that we won’t do that, so you will not be charged additional new fees as a result of this tax.
 
A big thank you to all 300,000 of you who sell on our platform and continue to make eBay a diverse and vibrant marketplace for sellers of all sizes.”

– eBay UK

63 Responses

  1. Because sellers are already paying 25% plus in fees, right now.

    They introduced sponsored listings and making a ton anyway. They realised domestic sellers were making up to 15 per cent and now they get that as a promoted listing fee on most of the sales anyway.

    No point selling on Ebay as a domestic seller. 2 per cent isn’t a favour. They will add it latter and already making an absolute killing.

    Looking at how many sponsored listing sales are coming through and so little margin or volumes, i think my time on this platform is coming to an end.

  2. @ifellow

    Surely it depends on what product you are selling?

    I just got a nice offer from eBay this morning reducing my transaction fee to 5p for managed payments (instead of 30p that everyone has been complaining about).

    I don’t think it’s fair to be making the sweeping statements you are making. Ebay do offer good deals, savings and promotions. The promotion this morning runs till next year. So eBay do a good thing but not passing this tax on and they still get shot down.

    For your statements to be valid it depends on what you are storing

  3. @ Alan Paterson

    Who the hell is providing these sellers with business courier and business postal rates for 4 months a year, every year. The cheapest courier is around £3.00 postable and royal mail 48 is around £3.10 based on this alone and the volumes you mention it would be difficult to sell for even 6 months before having to stop, and I doubt youd get the royal mail rate on and off as you please.

  4. @ Alan Paterson

    ‘Many of my clients sell over 100 small items per day’

    Each one of your many ebay accounts to dodge tax is a client . Wink wink.

  5. @Ross k

    Why are your crying ? Alan Peterson is going on about cutting costs and how 25p adds up.

    However I’m explaining to him how dump Ebay is.

    Try buying some nike or Adidas trainers what a laugh.

    Amazon charge the 2 percent because they can do. EBay Rips off domestic sellers on a daily basis and then insults them with this 2 per cent.

    All of us that have been on Ebay for over a decade aknow they will find another way to fleece us very soon above the tube of 2 per cent, and what a joke this.

    Giving some bead seller 25p off is of no concern to me, I didn’t get any discount. Alan peterson seems to think it’s a big deal, i dont, for one I haven’t got the discount.

  6. With respect Mr Fellow that wasn’t the issue. I note also you are spelling his name the same as “Admin.”

    His name is Alan Paterson not Peterson. He is one of the few who uses his real name on here and this is to illustrate integrity and openness. I don’t even put my full name.

    Difference of opinion is one thing.

    Character assassination is quite another. Goodnight.

  7. eBay and Amazon are both companies that invited and bent over backwards to help 10,000s of Chinese merchants onto thier platforms, because they were so scared of aliexpress. Knowing to well it would rip UK sellers apart. When they should have bought all the tax free goods coming into the UK to the governments attention ( doing the right thing) But they didn’t want to do that as theyd rather make a quick buck and it might have shined some light into thier own tax affairs. 1000s of domestic sellers have left the platform or closed down since.

    At least Amazon is honest about who and what they are and arnt a shadow of thier former selves.

    I remember when FVF were not charged on postage for instance then everyone was forced more or less to offer free shipping whilst ebay added fvf too shipping and demoted those that did charge it, eBay pretending to care about domestic sellers is just Insulting. I’m sorry !

    Any one who thinks ebay wont find a way to make well and above 2 per cent in less than 6 months clearly hasn’t been around for long.

  8. I don’t get the hype about eBay waiving those 2% percent. It will be added indirectly later on.

    eBay+PayPal fees were less than current Mangled Payments. But basic maths is hard work for some sellers.

  9. And what’s that some sellers get 25p off their MP fees ? Why not each and every seller??!

    We’re not on MP payments yet. Despite eBay telling us it will happen “late July”. It’s mid August. We registered back in Feb/Mar.

  10. Any business going on 2 months holidays (stop trading) to stay under the Vat threshold is not a business. It’s a hobby.

    Business is when you go for Vat with sales of 60k because your new supplier (not from China) does b2b and requires vat and you just then work hard to be above vat threshold on time, otherwise the tiny profit margins kill the business almost instantly.

    Business is when your company takes a property lease for X years with utility bills to pay each month on top of other expenses. Does it need extra installation for an alarm and CCTV? Is this property too big or too small? Still gives me sleepless nights.

    (Small) business is when your company employs 2-20 people (not multi chains as mentioned above).

  11. why should ebay be applauded ?
    Who is doing who the favour?
    Ebay are paying their taxes ?
    So what

  12. Ebay will have took a calculated decision to use this as a PR opportunity
    We have no doubt The2%and more will be recovered quietly in fees and add ons in the future

  13. I look at it through the yes of a ebay business trader of over 12 years
    Was it the right and decent thing to do….. YES
    Am i grateful…. YES
    Will ebay now go ahead and reduce discounts, increase other fees, put up shop prices etc to claw it back by stealth as always… YES
    It really is a simple as that.
    Ebay have been shafting sellers for years, let us not clap too loudly for what will be a publicity stunt on their behalf, paid for discretely by sellers in subtle fee rises that won’t be associated with the Digi tax! this has been ebay for over a decade, why would they do anything else?

  14. eBay will not pass the UK Digital Services Tax to sellers in the form of fee increases.

    And if you believe that you’ll believe anything.

    Who is paying 25% fees? I pay 10%… what category costs 25% in fees?

  15. Good publicity stunt by ebay,,,,,,, but make no mistakes the 2% will be recovered elsewhere. It’s business. Simples.

  16. eBay promoted listings are a placebo for most. What happens if everybody pays for promoted listings? eBay gets rich and you get nothing but the exact same competition you would have if you hadn’t paid to get into the hamster wheel.

    I’m surprised so many people have fallen for promoted listings. You might as well open your own website and pay Google for adwords.

  17. I have to say that in my professional experience of over 15 years on eBay, they absolutely 100% without a doubt will pass this onto sellers one way or the other, it just won’t be directly charged.

  18. Credit should be given where credit is due. This is a good move by ebay.

    Now make another couple of good moves and get some momentum going.

  19. @NorthCrystal
    Thank Clapton I’ve never had that problem. My items show up fine so I’ve never had to pay any ransom money. You were probably targeted as someone in competition with many other sellers. They suppressed your listings and your competitors listings so you all had to pay. What do you expect from eBay? Some sort of level playing field?

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