UK VAT on paypal fees?

[kipper]

I am in the UK. Am I being charged VAT on my paypal fees?

[PayPal_AdrianO]

Hey KevTheAce,

No, PayPal do not charge VAT on any payments sent or received so no VAT is charged on the receiving fee. We don’t determine whether taxes apply, and we won’t collect or report any taxes arising from a PayPal payment. It is your responsibility to determine what, if any, taxes apply to the payments you make or receive and to collect, report and remit the correct tax to the appropriate tax authority.

In relation to charging a buyer for using PayPal, we do not charge buyers for using PayPal for sending money, nor would we allow a merchant to do so either. The fee is paid by the seller for receiving fund, not the buyer.

For more VAT information click HERE and HERE.

[The_Fixer]

Hi PayPal AdrianO,

Ok, Having read all previous, I am confused. Forget the value of the transaction. I am just interested in the fees levied by Paypal. The links provided above redirect to Ebay, where clearly VAT is charged, albeit at Luxembourg 15% rates. When money is received into a PayPal Account, it attracts a PayPal levied fee. Does this fee include VAT, and at what rate? If so, as requested above, how do we get invoice information showing that fee and the VAT element?

Also, you mention above that you would "not allow" a seller to recover the cost of these fees from a buyer. Why not and how would you stop it? Even HMRC charges for use of credit cards, as do thousands of other outlets. And I have seen nowhere in T&C's that this is forbidden. I intend to offer payment by PayPal as an optional service to buyers, but not at a loss to myself.

We do not use EBAY, so in the above context, it is with regard to receiving credit card payments via PayPal against invoices we raise.

[PayPal_AdrianO]

Hey The_Fixer,

Once again, there is no VAT charged on payments received through PayPal. Our fees taken from the payment are for the service we provide and they do not include VAT. Yes the links were to eBay where it explains what you should add on if you are a UK seller, but this does not relate to PayPal.

In relation to surcharging, I apologise for the misinformation. Surcharging is outlined in section 4.5 of our User Agreement which you can see here.

[The_Fixer]

Ok. Retailers (ie me!) have to charge VAT on any costs (if we need to pass them on) for offering the service, but there is no corresponding input tax to claim back. Many thanks for your quick reply. 

[slaw1976]

I do not understand anything. is a simple question.

I am VAT registered in England.

whether fees on paypal is charged vat? I understand not. ok. so i pay my fees on luxemburg yes?

if yes can you tell my the paypal vat number on luxemburg?

i need know that for vat settlements. and where i find invoices for my fees ( not raport but invoices i pay for that so i need invoices )

thank you

[Dazjim]

Ok if we can't claim it back on transaction fees, in a linked issue, if we subscribe to the PayPal terminal service - (£20 per month) as that is an on-going business expense, can this be included in the VAT we claim back please?

It seems lop-sided if nothing can be claimed back whatsoever - when both are a business expense by definition.

Thanks in advance.

[roseyannj]

I am confused, as two moderators have given opposite responses.

The fee that is charged to my company, as the seller, of 3.4% plus 20p per transaction - does it or not include VAT, please?

[PayPal_Conor]

Hi roseyannj,

Welcome to our Community Forum

Happy to clarify that for you!

The selling fees you are charged by PayPal do not include VAT. 

However, you can customise your PayPal account to add VAT to the final price of your sales.

To select this option and specify the VAT rate:

-Click ‘Profile’ near the top of the page.

-Click ‘My selling preferences’.

-Under ‘Selling online’ click ‘Update’ next to VAT.

-Click ‘Add New Sales Tax’ in the Domestic or International section to add a new rate.

-Enter the rate and click ‘Continue’.

-Repeat steps 5 and 6 for each new rate needed. 

I hope that helps roseyannj,

Conor

[Jamie_Bartleet]

Why is it so difficult to clarify this?  PayPal fees do not include VAT, so, please can you tell me... is that classed as Exempt, Zero-rated or No VAT?

Thank you.