Hi all,
I have been tying myself in knots with this one. Whilst going through my listings on eBay I realised I am paying VAT on eBay fee's twice (I think) so please can you help me work this out.
This is an example of how I came to this idea.
First eBay now charge VAT on fee's every month but I have been including this in my price already.
I pay £9 for an item and sell it for £11.26.
VAT is included in purchase price so I claim that back so I can forget the first amount of VAT on that £9.
That leaves £2.26 so I divide the £2.26 by 6 and that gives the amount of VAT i pay = 0.38p.
Then at the end of the month eBay charge me VAT on the fee's for this sale £1.08 selling fee's divide 6 = 0.20p VAT charged by eBay.
But I have already paid VAT in the £2.26 because I divided it by 6 and eBay's selling fee of £1.18 was out of the £2.26.
0.38p VAT on that £2.26 margin
+ 0.20p at the end of the month for the £1.18 eBay selling fee's
Did I already pay the 0.20p VAT on the eBay selling fee's when I divided the £2.26 by 6 in the 0.38p ?
Because £2.26 margin
£1.18 eBay selling fee + 0.20 Vat + 0.70p profit + 0.18p VAT = £2.26 margin
This makes up the 0.38p I pay HMRC. Then eBay charge me the 0.20p on top of this at the end of the month (which I claim back) but have I already paid it out of the £2.26?
It was hard to explain so I hope you can understand my example.
Thank you in advance for any help you can give to clear this one up for me.
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