Problem with Linnworks and eBay automatically collected Sales Tax
started a topic
17 days ago
There's a problem with how Linnworks currently displays and handles sales tax that is automatically collected by eBay. We're based in the UK and say for example we sell an item for £100 to a buyer in Australia. eBay now automatically collects sales tax from Australian buyers and pays it to the Australian tax authorities (and does the same for some other countries) so there could be say £7 of tax collected by eBay (not us, it's nothing to do with us or the UK govt) on that £100 order. So we sell an item for £100, receive £100, but eBay charges the buyer £107 and pays £7 to the Australian govt. But on Linnworks, the order comes through as £107 with £7 of tax included in it. This isn't correct because we aren't collecting or declaring any tax on the item, eBay is doing so, and from our point of view the order is just £100. This is a problem because the "tax" field on Linnworks is used to tell our accounting software what UK VAT we are paying on an order, and this isn't VAT, it's australian sales tax that has nothing to do with us (it is basically import duty payable by the buyer to their govt being added to our Linnworks orders). So this £7 would be added to our VAT return if we hadn't noticed it and we could be incorrectly paying additional VAT that we actually haven't collected from customers! It also means the invoice amounts that come through to our accounting software are incorrect, because the buyer isn't paying us £107, we are only invoicing and receiving £100. Needs fixing fairly quickly really as I imagine there are a lot of Linnworks customers with regular eBay orders in which this happens, and most probably aren't even aware of it as a problem.