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Why selling on eBay just got more expensive

John Fitzsimons
Written By:
John Fitzsimons

Thousands of people selling goods on eBay will see the cost of using the site increase. Here are the best alternatives.

Since the start of August, sellers have had to pay 20% VAT on top of their fees, following a legal restructuring for eBay which means that sellers now pay their fees to eBay UK, rather than its Luxembourg subsidiary.
Alan Pearce, VAT partner at accountants Blick Rothenberg, explained that most VAT-registered sellers will be able to recover the additional VAT charged through their VAT returns.

He added: “However, non-VAT registered businesses (i.e. those legitimately trading under the current £85,000 taxable turnover threshold) and those registered under the flat rate scheme will have to suffer the extra VAT going forward. Those who choose to register voluntarily will also have the benefit of being able to claim back the VAT paid on fees.”

In other words, small and microbusinesses are the ones most likely to have to pay more, with the additional tax bill potentially costing them thousands.

Private individuals who sell on eBay are not affected, as they will have already been paying VAT on the fees in the past.

The fees you pay for selling on eBay

All sellers on eBay can list 20 items for free each month, though this does not apply to listings made in the Cars, Motorcycles and Vehicles category. After that, a 35p ‘insertion fee’ applies.

When your item sells, you are then charged a final value fee, which comes to 10% of the final transaction value, including postage. A £250 cap applies.

Additional fees may be charged if you want to optimise your listing. For example, adding a ‘Buy It Now’ price costs 50p, while adding a subtitle costs £1.

If you’re selling a lot, then it may be worth investing in your own eBay Shop. This costs £19.99 a month, and includes 100 free listings a month and reduced final value fees of 8%.

The best alternatives to eBay

There are a host of other options if you want to sell your goods online besides eBay.

Shpock markets itself as a ‘boot sale app’, and there are no listing or transaction fees for sellers. However, there are a host of ways that you can spruce up your listing to attract attention, which will come with additional fees. These range from 69p up to £13.99.

Preloved is another site for selling second-hand goods, and individual sellers are not charged a listing fee nor a transaction fee. Business membership costs £20 plus VAT per month, and allows up to 100 listings a month. There are all sorts of additional perks here, such as linking to your business’s website and including video adverts.

Then there is eBid, another auction site. Casual sellers are not charged a listing fee, though there is a 3% transaction fee to pay if your item sells. More regular sellers can sign up for the Seller+ subscription, which removes this transaction fee. Seven-day membership costs £1.99.

There’s also Gumtree, a listing site, which is free for individuals to use. Businesses do have to pay fees to list their goods, though this varies depending on what they are selling. Listing items in the ‘For Sale’ category for example costs £2.

Aside from online sites, you could try a good old car boot sale to make money from your unwanted goods. This has the added benefit of doing away with the usual postage and packaging costs. You’ll usually have to pay a pitch fee for your car (c.£10 depending on the location), though vans will cost more. Make sure to bring a packed lunch so you don’t eat into your profits.