VAT to be added to discog sale price

[pitch]

This is surely very bad news:

"Are you based in the EU (European Union) and selling on the Discogs Marketplace? Read on.

As you probably know, the EU has updated its VAT (Value Added Tax) policies to include third-party services. This means that we are held accountable for ensuring that sellers in the EU are taxed appropriately for the VAT. Starting this summer, we will add the VAT charge for your country onto your sellers fees.

All VAT fees will be assessed to the 8% Discogs Sales fee. There will be a separate line item on your invoice labelled "VAT fee".

Does this mean (for UK) they are going to stick 20% on as VAT fee, and not only that - going to include that in calculation the 8% sales fee? This is going to hurt isn't it?

[Willy-Fogg]

I read it as 20% VAT on the sellers fees only.

So the sellers fees will now be 9.6% rather than 8%.

Hope I'm right and that's all it is!

WF

[eine]

You are right. VAT is being added to the 8% seller fee that Discogs charges us. So VAT is not added to every sale, but rather monthly, to the Discogs fee.

[Viva Chiba]

So it's still bad news - just not that bad. I was confused by that email too - very poorly worded.

[pitch]

I read it as 20% VAT on the sellers fees only.

So the sellers fees will now be 9.6% rather than 8%.

Hope I'm right and that's all it is!

WF

Ah - I think you are right! Not so bad..... I am pretty rubbish at deciphering stuff like this - but that was a rather confusing way of stating - "we are now required to add 8% VAT to our seller fees" - I wonder if that rate varies country to country as seems to be implied?

[Hayes]

Ah - I think you are right! Not so bad..... I am pretty rubbish at deciphering stuff like this - but that was a rather confusing way of stating - "we are now required to add 8% VAT to our seller fees" - I wonder if that rate varies country to country as seems to be implied?

Interesting that the EU is finally clearing up this grey area. Still, it could be worse - the vat is only applied to the service discogs provides, not the sales of the records. And yes, the rate of vat will vary depending on the location of the seller:

"If you are selling from a country located in the EU, your country’s standard rate for the VAT will be added to your Discogs fees"

(That's taken for the discogs page explaining things, which is a bit better than that email.)

It also doesn't matter if the sale is to outside of the EU, the tax applies to all sales.

[reza]

So will it be coming to ebay as well then ? 20% vat on top of 10% sellers fees and what about the 10% they charge on postage is that VAT applicable ?

[Hayes]

if there isn't going to be a vat charge coming in to ebay I'd be surprised but then I haven't read into the new eu rules, only discogs's application of them. Discogs clearly point out though that the vat is charged only to the website's services, the sellers' fees, not the item item being sold on the site.

There is so much money flying across multiple borders that isn't being taxed (- because there haven't been any rules & systems in place) that it's no surprise they're finally moving to start catching some of it. This sounds like a fairly reasonable approach to me but then as I said I'm not up to speed with the bigger plans.

[Milesago]

So will it be coming to ebay as well then ? 20% vat on top of 10% sellers fees and what about the 10% they charge on postage is that VAT applicable ?

According to their website, Ebay already charge sellers VAT, it's just not itemised separately in the bill they send you.
VAT is applied to the full amount paid by you to ebay, irrespective of how ebay calculated that amount - so yes, the fee they charge on postage is included in the total used to calculate the VAT! So you're paying VAT on a fee invented by ebay thats levied on shipping costs which you will already have paid VAT on at the post office when you bought the stamps. Clear?

So far Paypal have avoided these online VAT changes, but it's only a matter of time.

I'm not sure what the logic is behind charging non business users of online services VAT.
It's not going to bring back the high street, and it's not redressing any imbalance as far as I can see.
It's just another tax.
It's much easier to just tax everyone and have the service provider collect the tax rather than go after professional (or semi-pro) sellers who are using online sales to avoid paying VAT.

This will also affect amazon, etc.

[eine]

Amazon have also brought this in, and give you a VAT breakdown every month on your sales, I think.

In my experience, of all the online retailers they take, by far, the biggest cut.

[Paul-K]

VAT is now applied to bandcamp as well. im not sure how it all works

[relkeel]

So theres a chance it will rise further if the Conservative Workers Party get re - elected?

[babycart]

So theres a chance it will rise further if the Conservative Workers Party get re - elected?

Of course it won´t.
They´ve explicitly ruled it out, just like they did in 1979, 1992 and 2010.