I always thought of Reverb as this fancier classifieds board that can also act as a money transfer service between the seller and the buyer. Just like the old school mail, cash on delivery and such. I don’t see anything disruptive there. People have been selling their old stuff for years - in newspapers, during car boot sales, flea markets, or in simple classified boards online. Transfering money as well. Nobody ever paid the tax for an old vacuum cleaner or a vase.
At least in my country, such exchanges are not treated as taxed economic activity. I think, you only need to pay if you score a significant profit (which is rare if you’re not selling valuable antiques) and your yearly sales exceed some limit (more than a couple thousand euros I think). On top of that, the only taxed lump of money is above that limit.
They disrupted the used gear sales market online by creating a global platform where selling & buying was made easy but came with quite high fees for sellers. And now they’ve raised their fees frequently and now when faced with increased taxes, instead of paying them they make their customer pay more.
And yeah, I only buy stuff from Reverb if it’s rare or not easily available elsewhere basically. I’ve bought a Boss BX16 mixer, an 80s Boss bass chorus pedal and a Sherman Filterbank from Reverb. Got a pretty good price, but I’ve seen all sold for cheaper locally later.
Maybe, altho in my experience professionals selling on Reverb have higher prices than private sellers because they have other expenses than just taxes to cover. So this might not affect the regular joe who’s selling a synth to finance car repairs at all.
Yea that sucks - no one gets to keep taxes though other than the government and it wouldnt make sense for reverb to pay taxes on your behalf - sounds like a tax situation more than a reverb situation - are ebay doing something similar in canada?
I’m in the UK and the things people buy from me aren’t taxed on Reverb. VAT is something only a registered business needs to handle, which I’m not. If you are a registered business on Reverb in the UK then VAT will be part of your sales - likewise I assume a user with a VAT number attached to their account also doesn’t pay VAT on their purchases. Reverb in no way benefit from any of that though - if anything they’re doing you a favour by minimising the paper work - i.e. if you’re in the UK and a business and they didn’t collect the VAT you’d have to rationalise that in your accounts somehow and essentially lose 20% of your sale.
Is this one of those situations where you can stop using reverb to avoid paying the tax, but then you’re just avoiding paying taxes?
Maybe I don’t understand the problem here though tax is wild. If I got taxed on all my used sales I’d have a heart attack haha
ha yea I guess I don’t get it - here in the UK the buyer pays the sales tax - not the business you buy the stuff from. In canada is it different? The business here just collects the money from you and passes it to the government.
Ah got it, just saw your edit - so I guess that’s a big hit for the marketplace platforms especially if you’re not expected to pay that tax as a private seller. Seems the government are treating them as a traditional retailer rather than a platform - so that sucks for everyone really
Not sure where it works that way but not here in the UK.
When you buy stuff you pay the VAT at the point of purchase, the seller collects it and files it quarterly to the government.
Here’s an example: The price includes the VAT, it’s collected from me when I buy it - Perfect Circuit don’t keep that money, they pay it directly to the government minus their VAT outgoings (unless they’re on the flat rate scheme).
BUT that’s only relevant for a VAT registered business, which I’m not, so I wouldn’t have VAT added to my sales on Reverb.
Yeah, the seller charge you extra but pays the tax. You’re not under any obligation to pay any taxes from goods under VAT, if the seller for example forgets to charge tax or to file it, they get in trouble, not you.
They collect the tax - you pay it. This is a semantics discussion but an important one haha
They’re obligated to collect it though you’re right - if they didn’t the government can’t come after you. They would then need to pay it on your behalf.
It’s a tax intended for making luxury items more expensive for the buyer (in the UK), it wouldn’t make sense for the buyer not to foot the bill, it would undermine its purpose.
i.e. most food in the UK doesn’t have VAT applied, but things like cakes do.
No, they’re under obligation to collect it and pay the tax. You have to pay the seller what they ask, and the goverment wants VAT out of every purchase you make, but in the end you’re not paying tax, you’re paying for goods or services and the seller is required to handle all tax duties. Semantics, sure but while you have to pay ~20 out of every purchase due to VAT, you don’t really need to think about it at all.
If a shop accidentally sells stuff at a loss, say they forgot to add sales tax to the price and you buy something, they’re obliged to pay the taxes, not you.
For full disclosure I’ve been a director of two businesses that had to file and manage VAT. I don’t want to be that guy, but we’re possibly talking cross-purposes here. Regardless in the UK buyers pay VAT on luxury goods when bought from a business that’s VAT registered - that’s really the only point I was trying to make.
haha ah man sorry to hear that - I totally get what you’re saying either way - I’m just not sure where it all fits in. You’re not wrong as such we’re making slightly different points I believe.
I shouldn’t have waded in anyway this is Canadian business - it sucks either way I heard similar things happening in the US with tax on used sales it would really impact my hobby!
I’ve run businesses in Canada since I was a teenager. It’s a perennial confusion, Tax.
What reverb is going to start doing is COLLECT sales tax from the purchaser (the government requires businesses to do so) and then remitting them to the CRA. In Canada it has always been the buyers responsibility to pay, and the business’s responsibility to collect and remit.
As a benefit, businesses in Canada can “write-off” sales tax from their purchases and recieve a refund. It’s free to get a tax ID and you can then write-off the sales tax on any justified business expenses.
Cheers.
I understand why Reverb needs to do this. They are running a massive business and need to abide by regulations. I don’t feel that there is any motive beyond that.
It’s just shifted the perspective now. Whereas before it operated more closely to a Craigslist sort of thing it’s now more like a consignment shop. And the difference between what a buyer pays and what the seller receives has grown substantially.
I’m sure they will still maintain a large user base. But for private sellers now having to discount gear an extra 10-15% to keep prices reasonable for buyers it doesn’t make much sense most of the time and many buyers/sellers will probably look elsewhere wherever possible.
