Legal and Tax verification impossible?

[PopKitchens]

My shop was originally opened under my own details but I have since incorporated as a UK Limited Company. I now have to verify company info under Legal and Tax Info, which is fair enough.

To verify I have to upload the certificate of incorporation. As the upload prompt suggests: 'Your document should confirm the details you provided (Name of legal entity) so I also need to changed the Name of Legal Entity field from my name to the company name. Unfortunately the taxpayer ID can't be changed until the certificate is verified but the certificate is in the company name not my personal name.

This seems to be a catch 22 situation - I can't change either thing without changing the other first.

I've been messaged Etsy Help Centre for over a week and only receive formulaic responses telling me to upload documents. No acknowledgement of the actual problem at all.

Does anyone have any ideas or do I need to close down my shop and start over?!

[Amaradorn]

I don't know the answer. Etsy has a lot of bugs and the support staff are not as knowledgeable as they could be (they tend to read from scripts). You can try replying to the support email and tell them you still need help. Sending screen shots may help. Don't open a new support ticket otherwise you will just get the canned responses again.

If all else fails : Since you have no sales in your current shop then it might be best to start again, however you would need to use a different email address and the shop name cannot be the same (you could add 'UK' if there is room). Just bear that in mind.

[CraftyCornishMaids]

Change the e-mail to a different one,

then you can open another shop with the e-mail this one had, but it will have to be a new shop name

[YonksRox]

You mention earlier in the thread that UK sellers don’t need to enter tax details unless they reach £85,000 sales. Is that accumulative total or per annum. Thanks in advance.

[FancyTogs]

@YonksRox 

The "tax ID" that Etsy asks for is a VAT registration number, but it is only needed if you are VAT registered.

£85k is the UK VAT registration threshold. You need to register for VAT with HMRC when your turnover exceeds £85k in a rolling year.

https://www.gov.uk/register-for-vat

Lawrence

[FancyTogs]

"I have since incorporated as a UK Limited Company." - You, yourself, have not been incorporated as a limited company. Individual people are not limited companies. You have created a separate legal entity which is the limited company and transferred your business to that company. You may own that company, but it is not you, you are not it.

"Unfortunately the taxpayer ID can't be changed until the certificate is verified but the certificate is in the company name not my personal name."

If the shop is a company shop then your name is irrelevant to its identity, other than to declare that you are a Director. When the company is the shop owner, the company is the tax payer. You are not the company, the company is a separate independant legal identity.

It is not possible to transfer ownership of an Etsy shop. If you opened this shop in your name then the company may need to open its own new shop in its own name.

Having said that, you may still be able to change the legal identity and tax ID details on Etsy to those of the company. Just remember that your personal identity (and your personal tax details) are not the same as the company's, don't mix them up. So the shop is in your name as the company's representative, but the shop legal identity and the tax ID are those of the company (not you).

Back up everything (listings and financial data) before editing, because you get a limited number of retries and then they suspend the shop. We went through a shop re-verification process last month and chose to go into vacation mode at month end to freeze the financials, allowing us to download everything including getting a closing VAT statement for the outgoing month, just in case of disaster, before we started messing with the shop's identity fields.

Lawrence (Clare's other half)

[EmaShop01]

When you enter the Etsy help center, in the question sections, there is a section "Isn't it enough, write to us", write from there. The robot in the chat section also connects you to the agent, customer service

[PopKitchens]

Yes I know the difference, I mean I was operating as a sole trader when I opened the shop and have since formed a ltd company.

There's a section called Primary Taxpayer ID and a field called Name of Legal Entity. Obviously on set up that name was just my name but now it needs to be the Ltd company name.

It sounds like its not possible to transfer a shop from your own name as a sole trader into your company's name then. I'll shut it down and open a new one.

@EmaShop01 - The robot put me through to what I think was a real person but they just gave a template response that read as though they hadn't read my message to see what the issue was. I sent more replies in the conversation to highlight this but its been 6 days without reply now!

Thanks for your advice everyone.

[StaySeenCollective]

Hi this is really helpful!

Do you know what you should include as the Tax Payer Identification 'Full Name' when the legal entity is the business name?  Do you repeat the business name as the 'Full name'?

Thanks

[FancyTogs]

My point was that I think that you can still be the named user running the shop, while the shop ID is the company for tax purposes.

Etsy consider a VAT registration to be the taxpayer ID, they don't understand what VAT is, they think it is some sort of business registration and income tax.  As far as I can tell they verify the name of legal entity field against the business name on the VAT registration using the HMRC VAT registration lookup.

Your VAT registration number verifies as "UP NORTH CABINET MAKERS LIMITED" so that is probably what you need to have in the name of legal entity field.

I don't know if Etsy allow entry of company number or verify against company name with Companies House. I've never seen company registration, registered office and names of directors displayed on an Etsy shop page as Seller Details which is a(nother) legal oversight by Etsy, you can include it as text in your T&Cs though.

Lawrence

[PopKitchens]

Yeah when you go to Shop Manager->Finances->Legal and Tax Information->Edit the first option is to select whether you're an individual or an incorporated business (which implies what I'm trying to do isn't against the rules).

Under 'Individual' the fields under Primary Taxpayer ID are 'Full Legal Name' (i.e. my name) and VAT number.

Switch it to 'Incorporated Business' and the first field changes to to Name of Legal Entity (i.e. ltd company name). Meanwhile your Primary Taxpayer ID details as an Individual are moved down to a new section called Primary Business Owner. My name remaining there makes sense but the VAT ID does not as its only the company who will be charging VAT and filing returns with HMRC.

I can add the business name and VAT number but every option below remains greyed out, including Submit.

Interesting what you say here: 'Etsy consider a VAT registration to be the taxpayer ID'. I wonder if its because they think the VAT number is tied to me as a sole trader as that's how the information is set as the individual account on Etsy but in reality that's the limited company's VAT number. It was erroneously entered before these new rules and perhaps their system has become confused by that. According to this form my business VAT number is the same as my personal VAT number which is obviously impossible. There is no way to delete the VAT number wrongly tied to me as an individual on here. It's even a mandatory field and I don't see how as a huge number of sellers won't be VAT registered and if some will need to deregister.

I have just tried and succeeded in changing my Individual VAT number to my old deregistered Sole Trader VAT number. When trying to change seller type to Incorporated Business again everything else still remains greyed out.

Totally at a loss now. I've done further digging on these forums (searching through google gets more relevant results) and there are many who had similar issues. I thought there'd be a solution because we can't be the only one who incorporated after setting up a seller's account here. Its a good job we hadn't focused on Etsy sales at all and spent time building up a shop up until now as this could be a huge blow for other businesses.

Many thanks for your help Lawrence!

[CraftyCornishMaids]

Etsy doesn't require anyone to put any tax number in, if you are in the UK.

(unless your revenue approaches £85,000)

But once you put them in, you can't change them

You can't change the VAT number, you have to get etsy to remove it, then you can add your business one

[FancyTogs]

@PopKitchens 

Etsy don't understand VAT. They appear to treat the VAT registration number as a personal income tax ID rather than as a sales tax registration for selling to a country. In some EU countries VAT registration is  tied to business tax reporting and business registration.

It is possible to not have a VAT registration number, most UK sellers on Etsy don't. Once you have entered it only Etsy support can delete it.

I suspect that you will still need to use the Ltd company VAT number, even though the field is located in the personal info section. It is required for reverse charge invoicing of shop fees.

Etsy are very weak on their understanding of business practices outside the US of A. They often make it very difficult (impossible) for professional (non-hobby) businesses in the UK & EU. They must be losing out on a lot of larger UK/EU sellers because of it.

I'm rather reluctant to start messing with our own shop screen to see the options!

Have you checked teh help pages?
https://help.etsy.com/hc/en-gb/articles/360000337047-How-to-Update-Your-Legal-Name-and-Taxpayer-Info...
https://help.etsy.com/hc/en-gb/sections/13667078339479-Taxes-on-Sales-Imports?segment=selling

Another idea: is it asking you for a reason for legal entity name change?  There is a popup with options for correction or for legal name change. If you are using the legal name change, try the correction option instead.

Lawrence

[AvenueAntiques]

I am in the same boat. I am getting no where and it is so frustrating! No one gives me an answer either

[BlinxUK]

@PopKitchens Hello Pop Kitchens - I am hoping you can help me with a similar situation you experienced. I am new to Etsy - so I am not changing from an individual to a business like you were...I am trying to set up as a business to start with. But I have the same issue you had - it *seems* impossible to submit valid tax verification documents. It is asking for personal docs to be uploaded (passport, driving license etc). It says the docs must have DOB, address and legal entity name. Docs I have with the 'legal entity' name of my business on obvs don't have my personal details on like DOB. And the passport image I sent got rejected because it doesn't have my business name on it (obvs). So I can't get through verification at all. Wondered if you had any ideas given you had a similar issue? I tried changing the Legal Entity name to my personal name, so that the personal docs matched the details - but it liked that even less (red error message instead of yellow - haha!)

[StarlightOriginalsCo]

Hi, just reading through these posts and am wondering whether anybody else has experienced the same problem as me regarding submitting identity documents to Etsy?

I am a Director of the limited company which is the legal entity behind our shop and we have been on Etsy for 4 years. For over a week now I have been attempting to upload ID docs as requested by Etsy following the recent new regulations. The docs have not been accepted and I keep getting the same automated emails which seem to be coming from 2 different sources – saying that the documents have not been recognised. Our shop has been placed in holiday mode for over a week and I can’t do anything to resolve it.

The upload prompt in the backend of our shop seems to be requesting a document in the name of our limited company with my own birthdate, and the system seems to have confused the identities of myself and my limited company.

In addition to my UK passport I have also tried to upload a copy of our Certificate of Incorporation for our limited company, which has also not been recognised.

I am at a complete loss and customer service and help are non-existent. Just the same automated emails and a suspended shop. Has anybody else experienced this? Does anybody know how to resolve the situation? Thanks all

[KnittingByPost]

I just want to add a "me too" to this.   Having exactly the same issue.   

I've also tried confirmation statement and address documents on hmrc website.  

I tried the chat but to no avail.  We are now permanently 'on holiday'.   I have refunded the most recent orders and moving on to other things.   

Its the final straw for us in a long list of poor support for customers and sellers.

ByeBye Etsy.

[CraftyCornishMaids]

things from websites won't work,

when we have to re-confirm on amazon, I have to get a printed document regarding my UTR physically sent to me from HMRC

etsy is similar, and copies of documents, have to be copies of actual physical documents

.....

I was going to suggest ravelry, but you have this in your descriptions

■ The designer will allow the sale of finished items made from this pattern to be sold on the condition that finished items are not produced commercially.

which, as a UK seller is not legal

[KnittingByPost]

This is an off topic reply.   

You said..

"I was going to suggest ravelry, but you have this in your descriptions

■ The designer will allow the sale of finished items made from this pattern to be sold on the condition that finished items are not produced commercially.

which, as a UK seller is not legal"

I am not just going to leave false information hanging there.  

In the UK, knitting patterns are protected under copyright law as literary works. This is established under the Copyright, Designs and Patents Act 1988. The designer, as the copyright holder, has the exclusive right to control how the pattern is used, which includes whether finished items made from the pattern can be sold.

As per Section 16(1) of the Act, copyright holders can restrict:

• Copying the work (including producing the same pattern or design)
• Issuing copies to the public
• Adapting the work

When you purchase a pattern, you are entering into a contract with the designer, and they are legally allowed to impose conditions on how their intellectual property is used, including restricting the sale of finished items, particularly in a commercial setting. While individuals may sell handcrafted items, mass production or commercial manufacturing based on the pattern may be subject to restrictions as per the designer’s terms.

If you'd like more detail, you can refer to the Copyright, Designs and Patents Act 1988 here: https://www.legislation.gov.uk/ukpga/1988/48/contents

Please quote relevant laws if you are accusing someone of breaking them.

[CraftyCornishMaids]

well, I wasn't going to, but as you insist

https://www.legislation.gov.uk/uksi/2013/3134/regulation/34/made

you do not have your address and e-mail address in sellers details, with the trader box ticked
you do not have a right to withdraw policy (which should include your cancellation form)
you do not have a GDPR policy

therefore, you do not have a contract with the seller you can pursue

extract from the above law

0.—(1) Before the consumer is bound by an off-premises contract, the trader—

(a)must give the consumer the information listed in Schedule 2 in a clear and comprehensible manner, and

(b)if a right to cancel exists, must give the consumer a cancellation form as set out in part B of Schedule 3.

...

the patterns themselves are covered under copyright, which means you can't sell them, but unless the item itself, as a an image on it, that is also copyright, like Disney producing a knitting pattern for mickey mouse, then you can't stop people selling for commercial use under copyright.

The only way you can stop buyers from selling for commercial use, is by having it in the contract with them, on purchase 

however, you do not have a valid contract, because of the above.

also, even if you did, descriptions on etsy are not included in the contract with the customer

so, you COULD put something in the contract to bind them, but you don't even have a valid contract with them, even if there was a way to put it in, which there isn't

I won't bother posting the link to that. you already have.