Tens of thousands of UK eBay sellers will face a 20% VAT charge on their earnings.
Sellers have been told that if they earn £85,000 or more, they will face the increased VAT charge from August 2017.
The increased VAT charge is said to be as a result of a legal restructuring following the 2015 Paypal tax changes.
In 2016 the UK generated over $1.3 billion of the company’s revenue. However, despite the large revenue, the UK’s profit is relatively small due to its limitation to providing to eBay’s Swiss parent company.
The tax changes come alongside the UK governments drive to get more ecommerce companies to register for VAT in order to tackle overseas tax evasion. The National Audit Office has estimated that VAT evasion is costing the Treasury up to £1.5 billion a year.