Click the links to find out more about your legal obligations as a business seller:
Note: this page is for informational purposes and only applies to sellers based in the UK (with the exception of a limited number of territories within the UK that are not part of the EU, such as the Isle of Man and the Channel Islands). If you're based outside the UK, different rules are likely to apply. This page is not intended to be legal advice. If you're unclear about how any of these laws apply to you, please seek advice from a lawyer, Consumer Direct or similar professional.
This section is a brief introduction to the most important rules and regulations relating to the goods you intend to sell and the information you're legally obliged to give to people when you advertise those goods for sale (for example on eBay).
1)
You should tell eBay if you're operating as a business
You should register as an eBay business if you:
sell items that you have bought to resell
make items yourself and sell them, intending to make a profit
buy items for your business
The Unfair Commercial Practices Directive (April 2008) makes it an offence in the UK for a business to falsely represent itself as a private individual. So if you are misleading potential buyers into thinking that you are a private individual when you are in fact a business seller (ie: by not registering as a business seller with eBay), you will be breaking the law.
Find out more about why you should register as a business.
2
) It's your responsibility to ensure
your goods are of satisfactory quality, as described and fit for purpose - Sale of Goods Legislation
The most important piece of legislation in the UK relating to the sale of goods through eBay is the Sale of Goods Act 1979 (as amended).The act provides that wherever goods are bought they must "conform to contract". This means that items sold by eBay by business sellers to non-business consumers must be:
of 'satisfactory quality';
Therefore, goods sold by business sellers must not be inherently faulty at the time of sale, must match any description given to them and, allowing for factors like price, they must be fit for their purpose, defect free, safe and durable.
When considering whether goods are "fit for purpose", it's not only the obvious purpose of the goods that will be applicable. If you told the buyer that the goods will be suitable for a specific purpose (for example, "is suitable for wet conditions"), this purpose will also be relevant.
The Sale of Goods Act applies to both new and used items. It is worth bearing in mind that second-hand goods are likely to be judged less rigorously than new goods as it's not reasonable to expect that used goods will be of the same quality as new goods. In any event, sellers of second-hand goods are obliged to ensure that the goods they sell are as they described them.
For more information on your responsibilities under this law, we recommend that you visit Business Link's guide to the Sale of Goods Act, as well as the fact sheet produced by the Department for Business Enterprise and Regulatory Reform (BERR).
3)
You must include information about your business in your listings – Electronic Commerce Regulations and Distance Selling Regulations
Under the Electronic Commerce (EC Directive) Regulations 2002 you must provide the following information in the Business Seller Information section of your listings, your About Me page or on a Shops page no more than one click from your main Shop page:
full contact details for your business;
details of any relevant trade organisations to which you belong;
details of any authorisation scheme relevant to your online business;
clear indications of price, if relevant, including any delivery or tax charges and
your VAT number, if your online activities are subject to VAT.
For further information we recommend that you browse the BERR website, particularly the Beginners Guide to the E-Commerce Regulations 2002.
4) Always include
the correct pricing information – Consumer Protection Act
It is an offence under the Consumer Protection Act 1987 for business sellers to give consumers a misleading price indication about goods, services, accommodation or facilities. That applies in whatever way the price indication is given (e.g., written in a notice or leaflet, or given orally). It applies also to price indications that become misleading after they have been given, and to any indications given about the way in which a price will be calculated.BERR has produced a helpful list of FAQs and a more detailed explanation of the impact of this piece of legislation. http://www.berr.gov.uk/consumers/fact-sheets/page38133.html
5)
Make sure your listings are not misleading – Unfair Commercial Practices Directive
The Consumer Protection from Unfair Trading Regulations 2007, which replaced the Trade Descriptions Act in April 2008, implements the EU's Unfair Commercial Practices Directive and prohibits businesses from treating consumers unfairly. It obliges businesses not to use:
aggressive practices (such as pressure selling); or
misleading practices (includes both acts and omissions).
One of the key tests in the regulations is whether the unfair commercial practice in question materially distorts the consumer's economic behaviour (e.g. was the consumer persuaded to make a purchase they wouldn't otherwise have made because of the commercial practice?).
A breach of the Consumer Protection from Unfair Trading Regulations 2007 is, in most cases, a criminal offence. Find out more from BERR about the Unfair Commercial Practices Directive.
For further information on fair trading, please visit Business Link's guide to fair trading, trade descriptions and Trading Standards and fair trading advice leaflets from Trading Standards.
This section provides answers to the more commonly-asked questions relating to returns and warranties you offer to consumer (non-business) buyers, for example when you sell on eBay.
1)
Do I have to provide a refund if the buyer changes their mind?
- Distance Selling Regulations
Under the Consumer Protection (Distance Selling) Regulations 2000 you have to refund an item if the buyer changes their mind within 7 days of the day on which the item was delivered. However, whether the Distance Selling Regulations applies depends on the type of item sold and the listing format used (see "Where do the Distance Selling Regulations apply", below).
Under the Distance Selling Regulations, buyers have a period of 7 working days after the date of delivery within which they can cancel the contract (often referred to as the "cooling off" period) and get their money back, including the original postage and packing charges. You must refund the original delivery charges. However, you are permitted to require the buyer to pay for the cost of returning the item, but only if you clearly inform the buyer of this before the contract is made.
If you didn't provide information about your business required under the Distance Selling Regulations, the buyer has up to 3 months to cancel the contract and get their money back. To get a general idea of the laws governing distance sales, we recommend that you review BERR’s summary of the Distance Selling Regulations.
(Please note that, under the Sale of Goods Act 1979 (as amended), there's no legal requirement for you to provide a refund if the buyer simply changes their mind.)
2)
Where do the Distance Selling Regulations apply?
The Distance Selling Regulations generally apply to sales to non-business buyers made by sellers acting in the course of a business, which have been made at a distance. In other words, where there is no face-to-face contact between the seller and the buyer before the contract is made. The Distance Selling Regulations usually cover sales made over the internet, including:
Buy It Now listings on eBay.co.uk
Second Chance Offers on eBay.co.uk
The UK Distance Selling Regulations do not apply to eBay auction format listings on eBay.co.uk, and do not apply to all types of items.
If your listing doesn't fall under the Distance Selling Regulations, you're not legally obliged to refund a buyer if they change their mind. However, you may choose to provide a service that goes beyond the minimum legal requirement in order to encourage consumers to buy from you. For more information, see BERR’s summary of the Distance Selling Regulations.
3)
Do I have to refund a buyer if the item is faulty or damaged?
The answer to this question relates to the Sale of Goods Act 1979 (as amended). The act, described in more detail here, provides that items sold by eBay by business sellers to non-business consumers must be:
of ‘satisfactory quality’;
If an item you sell doesn't conform to these criteria, the buyer has the right to request money back within a "reasonable time". What is considered a "reasonable time" varies from item to item. For example, a pair of skis is unlikely to be used straight away, so a "reasonable time" is likely to be longer than for an item normally used on a daily basis. Other factors may also affect what is defined as a "reasonable time" for specific items.
In addition, the Sale and Supply of Goods to Consumers Regulations 2002 gives consumers a right to a repair or replacement where goods turn out to be faulty.
For a more detailed description of your statutory obligations, see Returns, refunds, warranties and complaints on the Business Link website. We recommend you access professional advice on your minimum legal obligations, then create a returns policy around those minimum obligations that provides a level of customer service you feel your business should provide.
4)
Do I have to replace or refund an item that gets lost or damaged in the post?
When a business sells an item to a consumer, the default position is that any loss or damage to the item that occurs in transit is the responsibility of the business. This means that you are likely to be required to replace items lost or damaged in the post.
Most eBay business sellers choose to replace lost and damaged items as a matter of course, using insured postage services where cost effective. However, if you'd like to know the precise legal position on loss and damage in transit as it relates to your business, we recommend you seek advice from a lawyer, Consumer Direct or similar professional.
5) Do I have to provide a warranty?
You don't legally have to provide a warranty. However, if you choose to offer one voluntarily, this will be legally binding. You may find that providing a warranty helps a buyer to choose to buy from you rather than another seller.
Remember that even if a warranty has expired, you may still have obligations under the Sale of Goods Act. For information about warranties, see What is a warranty? on the Business Link website.
6)
What if I provide a service?
Consumers are also protected in relation to their purchase of services. The most important law covering the supply of services is the Supply of Goods and Services Act 1982.
When it comes to the supply of services, tradesmen and professionals are required to carry out that service with reasonable care and skill and within a reasonable time. Similarly, if not explicitly agreed between the parties, the law will imply that any goods and materials supplied must be of satisfactory quality and at a reasonable cost.
For information on the Supply of Services legislation, we recommend that you read the brief description and facts sheets produced by BERR.
Consumer Protection Act
The Consumer Protection Act 1987 gives people the right to sue the producer, importer or own-brander of a defective product for damages in respect of death, injury or damage to property caused by the product. Please be aware that you will also be liable if you fail to identify the producer when asked to do so by the person suffering damage.
BERR has produced a list of FAQs and a more detailed document, which explains the impact of this piece of legislation:
http://www.berr.gov.uk/consumers/fact-sheets/page38253.html
http://www.berr.gov.uk/files/file22866.pdf
Further information about consumers' legal rights
In addition if you are a business selling to consumers you should be aware of consumers' legal rights.
Further information can be obtained from Business Link's consumer protection guide and consumer protection advice leaflets from Trading Standards.
The following section points you to places on the Internet where you can find out answers to your tax questions.
1)
I’m a business. Do I have to be VAT registered?
This depends on a few factors which are specific to your business. Read Should I be Registered for VAT? on the HMRC website to work out whether your business should be registered for VAT.
2)
Do I have to charge VAT on the items I sell?
HMRC's guide to VAT will also help you to find out whether you need to charge VAT on the items you sell. You may also find Business Link's Duty and VAT liability calculation tool useful for working out your tax liability when selling internationally.
Remember that If you're VAT registered, and therefore must charge VAT on the items you sell, the prices visible to buyers in your listings must be inclusive of VAT.
Note: Falsification of information to evade payment of VAT may result in civil fines and criminal prosecution. eBay cooperates with the police and other law enforcement agencies in cases involving potential falsification of information to evade payment of VAT.
3)
Do I have to pay VAT on my listing fees?
Since July 1st 2003 eBay has been legally obliged to charge VAT on seller fees to sellers who reside, have a permanent address or are established in the European Union. As an EU-based seller, your contractual partner is eBay Europe, S.à r.l., based in Luxembourg. You are therefore required to pay VAT at the Luxembourg rate of 15% on your eBay selling fees unless you qualify for an exemption on VAT on your seller fees. Sellers with a valid VAT registration number may apply for an exemption from VAT on their seller fees.
To apply for an exemption, please register your VAT ID with eBay. Please note that you can't claim back any VAT you paid on your seller fees before you registered your VAT ID with eBay.
4)
What about other taxes? Do I have to pay Income Tax or Capital Gains Tax on my eBay profits?
The amount and type of tax you should pay on your eBay earnings depends on how much you earn and how you earn it:
Business Link provides a general guide to issues relating to tax here
We also recommend that you consult an independent tax advisor
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