Reverb and VAT

[thebrig]

I've just made my first sale on Reverb but before they will pay out the money to me, I have to give them a VAT number for tax purposes.

 

I've been retired seven years and although my profile on Reverb say's "Brian's Bass Gear", I am not a shop or a business, so I do not have a VAT number.

 

I only opened my Reverb account a few month's ago but I didn't realise you had to have a VAT number to sell anything, so now I've had to cancel the sale because of this, and I will probably close my account as well.

 

Am I misunderstanding how Reverb works?

Edited March 21, 2024 by thebrig

[Aidan63]

Surely as you are a private individual you just give them your National Insurance number - they now have to collect data and share it with HMRC, if you sell more goods than the threshold, and make a profit it has to be declared, one of the low hanging fruit HMRC have decided to tighten up on on behalf of the government in order to maximise tax take without being seen to be raising taxes

Don't cancel the sale, just let the buyer know you are having to resolve this with reverb first before it all can complete, they should be patient

[binky_bass]

I've sold a fair bit through Reverb over the years, never needed to provide a VAT number...

[thebrig]

Reverb were insisting I give a VAT number, I even went through the online chat for advice, and this is how it went.

 

Reverb

As of 6 September, Reverb collects the required VAT on fees charged to UK sellers and remitting it to the relevant tax authorities. This policy applies to both individual and business sellers. You can check this article for the reference:

https://help.reverb.com/hc/en-us/articles/15478400563603-How-VAT-and-GST-are-collected-on-fees-charged-to-sellers

Me:

But I don't have a VAT number.

Reverb:

Prior to 6 September, Reverb has been paying for this VAT/GST out of pocket on sellers’ behalf. Given that this isn’t a sustainable solution, we’ve updated our policies. Please check this to your tax authority for the confirmation.

[uk_lefty]

20 minutes ago, thebrig said:

Reverb:

Prior to 6 September, Reverb has been paying for this VAT/GST out of pocket on sellers’ behalf. Given that this isn’t a sustainable solution, we’ve updated our policies. Please check this to your tax authority for the confirmation.

That seems very fishy to me. I don't for one second believe that Reverb, a business, has operated for so long paying taxes on behalf of their customers, it just seems like bullocks.

[badger]

20 minutes ago, thebrig said:

Reverb:

 

Prior to 6 September, Reverb has been paying for this VAT/GST out of pocket on sellers’ behalf. Given that this isn’t a sustainable solution, we’ve updated our policies. Please check this to your tax authority for the confirmation.

was  it a real person or  AI/chatbot though?

 

the only thing I can think is that they want a VAT number so they know *not* to charge you VAT on fees if you have one.  if you don't have one then they will need to charge you.  I suspect something's being lost in translation between 'mercan & English.

[thebrig]

24 minutes ago, badger said:

was  it a real person or  AI/chatbot though?

 

the only thing I can think is that they want a VAT number so they know *not* to charge you VAT on fees if you have one.  if you don't have one then they will need to charge you.  I suspect something's being lost in translation between 'mercan & English.

I spoke to a real person who was answering me in detail to my questions, etc.

[franzbassist]

eBay's the same.  Must be a new requirement since the law came in, as I've had a Reverb account for a few years and not had to add a VAT number. 

[markbunney]

An individual selling a second hand item would not charge VAT on it.

 

A business doesn’t have to register for VAT until it turns over £85k a year, so this seems an odd requirement from Reverb.

[Jean-Luc Pickguard]

What has changed is that you now need to pay VAT on the fees reverb charge you when you sell something.

 

I've unloaded a ton of my old gear on Reverb and noticed the fees got a bit higher when this new rule came in. I have never needed to supply a VAT number to reverb as I am also a private seller who isn't registered for VAT.

 

I fear there's been a bit of a misunderstanding Brian, and you have been given misleading information from the support person where the canned answers they gave you didn't apply to your specific situation and were parrotted directly from their screen without being filtered through their grey matter.

 

All you need to say is "I'm a private seller and I'm not VAT registered so I will have to pay the VAT on the reverb processing and selling fees"

 

Here's an example of something I sold recently — A nice set of Gotoh banjo tuners that I had on my tenor guitar before I sold it. The tuners sold for £60, plus £5 postage

 

The Processing fee plus the selling fee comes to £5.81 (£2.56 + £3.25)

The VAT is 20% of £5.81, which is £1.16

 

The payout is £65 - £2.56 - £3.25 - £1.16 (Selling price plus shipping charge minus processing fee, minus selling fee minus VAT on fees) which is how they arrived at the £58.03 which was deposited into my bank account.

 

[JoeEvans]

Jean-Luc has it right. Reverb will charge VAT on the fees then send it to HMRC whether you have a VAT number or not. If you had one, you could reclaim that VAT, but the customer's VAT status is immaterial to the supplier.

Tell them you're a private seller and not registered for VAT, and to hurry up and pay out or you'll report them to HMRC.

[thebrig]

I clearly told them that I am a private seller and not VAT registered, but their new policy applies to both individual and business sellers, and there was no way that I could see to by-pass the VAT number request.

[thebrig]

Can someone confirm that I have set up my tax info correctly please?

 

Cheers

 

 

Edited March 22, 2024 by thebrig

[thebrig]

I've just relisted the cab I had up for sale which was originally priced at: £245 + £15 delivery.

 

Now after submitting my tax info it's: £294 Incl. VAT + £18 delivery.

 

I know Reverb was going to take around £26 out of the £245 + £15 (£260 total) leaving me with about £219 after it sold, so what should I now price it at to get around the same amount after selling?

 

The price at the moment of £294 + £18 (£312 total) is too much to ask, so I've ended the listing.

 

Have I still got all this wrong? 🤔

Edited March 22, 2024 by thebrig

[Jean-Luc Pickguard]

You're not charging VAT on the items you sell as you are a private seller and not VAT registered, so the tax rate should be zero, not 20%

[thebrig]

6 minutes ago, Jean-Luc Pickguard said:

You're not charging VAT on the items you sell as you are a private seller and not VAT registered, so the tax rate should be zero, not 20%

Ah thanks.

[Jean-Luc Pickguard]

The whole section for Tax Policies is blank on my account as it doesn't apply.

[thebrig]

I've just put 0 in the tax rate section, selected UK and re-listed the item.

 

Thanks for your help.