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Client needs proof of non-VAT registration

Client has been told by Ebay that they have to give proof that they don't need to be VAT registered

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I've got a client who was previously VAT registered as she was over the threshold but went on maternity leave and so de-registered.  She only turned over £11k last year so there is no reason for her to be VAT registered. 

She said Ebay have told her that, as a business seller, she needs to get proof from HMRC that she doesn't have to be registered.  Has anyone else come across this with clients who sell through Ebay?  I've searched online and can't see anything that vaguely relates to this and have other clients who sell through Ebay who aren't VAT registered who haven't come to me saying they have an issue.  She said Ebay have told her that HMRC know about it and so if we contact them they will know what we are asking for.  I find it very difficult to believe that HMRC would put something in writing that says an individual doesn't need to be VAT registered as they have no idea what your current turnover is if you aren't registered.

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By SteveHa
03rd Apr 2018 13:33
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By bendybod
03rd Apr 2018 14:58

They aren't disputing what the VAT threshold is but they seem to want something that doesn't exist, in the shape of something official from HMRC to say that this particular trader doesn't need to be registered.
Since posting I have spoken to HMRC and got exactly this response that yes, they are cracking down on the likes of Ebay who have been too lenient in the past regarding checking the VAT status of traders, but this trader clearly doesn't need to be registered.
The only thing I can think is for the trader to offer to send her statutory accounts to Ebay to prove that her turnover for the past two years has been way below the threshold.

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Replying to bendybod:
Caroline
By accountantccole
03rd Apr 2018 15:45

Wouldn't a letter from you be better rather than giving all her accounts info away?

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By bendybod
03rd Apr 2018 16:00

Possibly. I was just wondering whether anyone else had experience of this issue with Ebay and had first hand experience of a solution that had appeased them.

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By thevaliant
03rd Apr 2018 16:26

Good for a laugh this one.

Prove a negative.

You can't.

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By bendybod
03rd Apr 2018 17:00

Not for the client who is being threatened with having her account closed down.

I totally agree though. Four different people at Ebay seem to be able to give her identical advice but none seem to be able to refer her to any documentation.

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Replying to bendybod:
RLI
By lionofludesch
03rd Apr 2018 17:32

Send the accounts or tax return.

eBay set the rules so they've no obligation to accept the client's business.

"Good for a laugh" it may be but they're entitled to satisfy themselves as to the client's bona fides. They're no doubt pressured by HMRC.

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By 401K
04th Apr 2018 15:17

Ebay are really looking for proof of de-registration? Surely she has the correspondence to confirm this? Ebay don't want to be held liable for the VAT.
Prove she has been de-registered and that's all she can do.

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Replying to 401K:
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By bendybod
05th Apr 2018 16:02

No, Ebay are not looking for proof of deregistration. They are looking for proof that she doesn't have to be registered now.

She's got to the stage where she's almost decided to forego her Ebay account as they won't accept anything reasonable. She has seven days of her 30 days response period before they block her.

We have been backwards and forwards contacting HMRC and contacting Ebay. She is now going back to Ebay and asking them for a breakdown of what they determine her sales to be.

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Replying to fawltybasil2575:
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By bendybod
06th Apr 2018 15:15

I meant to say 'HMRC advised her to go back to Ebay and ask them for a breakdown of what they believed her turnover to be'. My colleague did actually have what sounded like a sensible conversation with someone at HMRC about it who outlined the most common scenarios where Ebay get excited about these things but none apply to this trader. I believe it's a genuine mistake somewhere along the lines but Ebay are being stubborn as mules now. She's prepared to walk away from them over it though so not much point in pursuing it, other than personal satisfaction, which the client is not going to fund!

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By legerman
06th Apr 2018 12:40

I would have thought the deregistration letter would have been sufficient as it would relate to the same VAT no, but the OP says not so. That said, ebay are a law unto themselves anyway. A friend recently got an account deleted for "security" reasons. Wouldn't say why and refused to enter into dialogue.

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