You've spotted it on your eBay reports. On some orders, eBay collected the VAT itself and remitted it to HMRC, and you never saw that money. So a fair question follows: if the marketplace already paid the VAT, do you still file a return, and what goes on it?
The short version is that "eBay collected it" applies to a narrow set of sales, and for most UK-established sellers it changes far less than people expect. Getting the line between "eBay's VAT" and "your VAT" wrong is one of the most common ways an otherwise healthy eBay business ends up with a wrong return.
This guide is for UK eBay sellers who are VAT registered, or close to it, and want to know exactly where they stand. We'll keep the figures dated to 2025/26 and link every rule to the gov.uk page it comes from.
If eBay collected the VAT, do I still file?
Yes. If you're VAT registered, you still file your normal VAT return on time, even on returns where eBay accounted for the VAT on certain sales. The deemed-supplier rules move who pays VAT on a small set of transactions; they don't switch off your own VAT obligations on everything else.
The rules only make eBay the deemed supplier in two situations, and both involve goods linked to an overseas seller. They are not a general "eBay does VAT for sellers now" regime. So unless your sales fall into one of those two buckets, eBay is not collecting your VAT, and you account for it as usual.
What is the deemed-supplier rule, in plain English?
For certain online-marketplace sales, the law treats the sale as two supplies instead of one. The seller is treated as supplying the goods to the marketplace, and the marketplace is treated as supplying them on to the customer.
HMRC calls the seller-to-marketplace leg a "deemed supply". The marketplace then becomes responsible for charging and accounting for the VAT on the sale to the UK customer, at the point of sale, rather than the seller doing it.
The point of the rule is to put VAT collection in the hands of the platform for transactions where HMRC would otherwise struggle to collect it, mainly cross-border sales by overseas businesses. That focus matters, because it's exactly why most UK sellers are outside the rule.
When is eBay the deemed supplier and when is it not?
eBay is the deemed supplier, and collects the UK VAT itself, in two defined cases set out in HMRC's online-marketplace guidance:
- Imported consignments of £135 or less. Goods located outside the UK at the point of sale, sold to a UK customer through the marketplace, where the consignment value is £135 or less. The £135 applies to the value of the whole consignment imported, not each item. eBay charges and accounts for the VAT at the point of sale.
- Goods already in the UK, sold by an overseas seller. Where a seller who is not established in the UK holds stock in the UK and sells it through the marketplace, eBay accounts for the VAT on that sale. The overseas seller is treated as making a zero-rated "deemed supply" of the goods to eBay.
Outside those two cases, eBay is not the deemed supplier. In particular, a UK-established seller selling UK-located goods to UK customers accounts for VAT in the normal way, through their own return. There's a separate B2B carve-out too: on the £135-or-less import case, if the buyer gives a valid UK VAT number, eBay does not charge the VAT and the business customer accounts for it instead.
| Sale scenario | Goods location at sale | Seller | Who accounts for the VAT |
|---|---|---|---|
| Consignment of £135 or less, B2C | Outside UK | Any | eBay (deemed supplier) |
| Consignment of £135 or less, buyer gives UK VAT number | Outside UK | Any | Business customer |
| Goods in the UK | In UK | Overseas (non-UK-established) | eBay (deemed supplier) |
| Goods in the UK | In UK | UK-established | You, on your own VAT return |
| Consignment over £135 | Outside UK | Any | Normal import VAT and customs rules |
I'm a UK-established seller. Does this apply to me?
For most domestic trading, no. HMRC's guidance is explicit that the marketplace is made liable for VAT on sales made through it "by a seller not established in the UK". The deemed-supplier shift is built around overseas sellers, not UK ones.
So if you're a UK-established business, holding your stock in the UK, selling to UK buyers, eBay is not your deemed supplier. You charge VAT where due, you reclaim input VAT on your costs, and you report it all on your own return. Nothing about the marketplace rules removes that.
Where a UK seller can still see eBay-collected VAT is at the edges. If you ever sell low-value consignments shipped from outside the UK, or you sell into another country's marketplace rules, you may see VAT handled by the platform on those specific orders. That's the exception, not the pattern, and it's worth checking your own eBay VAT reports rather than assuming.
If you sell on eBay and want a second pair of eyes on which of your sales are genuinely yours to account for, our ecommerce accounting support for eBay sellers is built around exactly this kind of question.
How do these sales sit on my VAT return?
Start from your registration status, because that drives everything.
If you're a UK-established seller and VAT registered, you file your VAT return as normal under Making Tax Digital, keeping digital records and submitting through compatible software. MTD for VAT is mandatory for all VAT-registered businesses. Your standard-rated UK sales go through at the standard rate of 20% for 2025/26, and you reclaim input VAT on allowable costs.
Where eBay was genuinely the deemed supplier on a transaction, the VAT on the sale to the customer is eBay's to account for, not yours. You don't also charge output VAT on that same sale, or you'd be taxing it twice. The practical job is making sure your bookkeeping separates the handful of deemed-supplier orders (if you have any) from your normal sales, so your return reflects only the VAT you're actually responsible for.
For an overseas seller making only zero-rated deemed supplies of UK-held stock to eBay, the picture is different. They can register for VAT or apply for exemption from registration, and if registered they can reclaim the import VAT they paid when the goods first entered the UK. That's an overseas-seller mechanism, though, not something a UK-established seller uses for ordinary domestic sales.
The single biggest error we see is a seller assuming eBay "handles VAT" across the board, then under-declaring their own UK sales. The marketplace rules are narrow. Read your eBay transaction reports, identify the genuinely deemed-supplier lines, and account for everything else yourself.
Illustrative example: a UK seller with mixed sales
Illustrative example. Priya runs a UK-established eBay business, VAT registered, with all her stock held in the UK. In a VAT quarter in 2025/26 she has:
- £40,000 of standard-rated UK sales of her own UK-held stock.
- £2,000 of sales where the order was a low-value consignment shipped from a supplier outside the UK, and eBay acted as deemed supplier and collected the VAT.
On her own return, Priya accounts for VAT on the £40,000. At the standard rate of 20%, that's £8,000 of output VAT (£40,000 x 20% = £8,000). She then reclaims input VAT on her allowable business costs for the quarter.
The £2,000 of deemed-supplier sales is different. eBay charged and accounted for the VAT on those to HMRC, so Priya does not also charge output VAT on them. She keeps eBay's reports to evidence why those orders are treated separately, but the VAT on them is not hers to pay.
The headline point: eBay collecting VAT on £2,000 of orders does not reduce or replace Priya's responsibility for the £8,000 on her own sales. She still files, on time, for the rest.
What about the eBay sales report HMRC now receives?
Separate from VAT, eBay now reports seller information to HMRC under the digital-platform reporting rules, which started for activity from 1 January 2024. Platforms collect data each calendar year and report it to HMRC by 31 January the following year.
There's a de minimis: a seller is not reported where they make fewer than 30 sales of goods in the calendar year and receive less than 2,000 euros (about £1,700) for them. Above that, your details get reported.
Crucially, being reported does not automatically mean you owe tax. HMRC states this directly. Whether you owe income tax depends on whether you're trading, and the trading allowance lets individuals earn up to £1,000 of gross trading income a year tax-free; above £1,000 of gross trading income you must tell HMRC and register for Self Assessment. VAT and this reporting are separate systems, but sellers often confuse them, so it's worth keeping the two straight.
Frequently asked questions
eBay collected VAT on my sale, so do I still need to file a VAT return?
Yes, if you're VAT registered. eBay accounting for VAT on a narrow set of deemed-supplier sales does not switch off your own VAT obligations on the rest of your sales. You still file your normal return on time and account for the VAT you're responsible for.
Does the deemed-supplier rule apply to UK-established sellers?
Generally no. HMRC's online-marketplace rules make the marketplace liable for VAT on sales by sellers not established in the UK, plus low-value imported consignments. A UK-established seller selling UK-held stock to UK buyers accounts for VAT in the normal way through their own return.
When exactly is eBay the deemed supplier?
In two cases: imported consignments of £135 or less sold to UK customers, and goods already in the UK sold by an overseas (non-UK-established) seller. There's also a B2B carve-out on the £135-or-less import case where the buyer provides a valid UK VAT number, in which case the business customer accounts for the VAT.
If I'm not VAT registered, does any of this matter?
The deemed-supplier rules sit within VAT, so they're most relevant once you're registered or approaching the £90,000 registration threshold (current from 1 April 2024). Separately, the digital-platform reporting rules mean eBay may report your sales to HMRC, and you should check whether your trading income takes you over the £1,000 trading allowance for income tax.
Could I end up paying VAT twice if eBay already collected it?
You shouldn't, if your bookkeeping is right. On a genuine deemed-supplier sale, eBay accounts for the VAT, so you do not also charge output VAT on that same sale. The risk of double-counting comes from poor record-keeping, not from the rules themselves, which is why separating those orders matters.
Key takeaways
- If you're VAT registered, you still file your return, even where eBay collected VAT on some sales.
- eBay is only the deemed supplier on imported consignments of £135 or less, and on UK-held goods sold by overseas sellers.
- UK-established sellers selling UK stock to UK buyers account for VAT in the normal way, at the 20% standard rate for 2025/26.
- Don't double-count: don't charge output VAT on a sale where eBay was genuinely the deemed supplier.
- Digital-platform reporting (from 1 January 2024) is separate from VAT and doesn't itself mean you owe tax.
Not sure which of your eBay sales are genuinely yours to account for? Book a free 20-minute call with a Zmartly accountant and we'll review your eBay reports against your VAT return. Start with our accounting support for eBay sellers.
