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Can I rent out my PayPal account?

Discussion in 'Logistics - Payment & Shipping' started by sma123, Apr 16, 2016.

  1. sma123

    sma123

    Joined:
    Apr 16, 2016
    Messages:
    2
    Hi all,
    I have an unlimited uk PayPal account and my friend wants to use it for his dropshipping business in UK as his account is limited.

    I will be ok to let him use my PayPal acct for monthly service charge.

    However my question is it legally allowed to rent out our PayPal accounts and would I be viable only for the income tax on the monthly or do I have to take account for his turnover for VAT purpose as well?
    He's easily doing over 100k turnover every year.
  2. Gary

    Gary

    Joined:
    Aug 22, 2009
    Messages:
    16,364
    Circumventing PayPal limitations is against PayPal regulations and could easily see your account limited too.

    If you're allowing your friend access to your account, especially from a different ip address and it's linked to him in any way your account will almost undoubtedly be restricted or even closed.

    Also if you are having all of your friends imcome going through your business PayPal and bank accounts this would make it very difficult for tax and accounting purposes.

    The one possible workaround would be for the sales to go though your account, then have your friend raise an invoice for goods sold which you then pay as an expense but this WILL count towards your turnover.
  3. sma123

    sma123

    Joined:
    Apr 16, 2016
    Messages:
    2
    Thanks for the reply Gary.
    If the turnover counts then i will have to register for VAT and pay 20% of the amount, which will definitely be more than what i charge him , it may get quite complicated in that case.
    This setup is probably not viable in that case.
  4. Gary

    Gary

    Joined:
    Aug 22, 2009
    Messages:
    16,364
    Another possible workaround could be if you were to maybe set up offically as an agent charging a percentage or fixed rate for example (the percentage or fixed rate would be your income), but I'll be honest and say I'm not 100% sure if or how this could be done in these exact circumstances as it's not an area where I have experience.

    Though if it can be done you would keep full control over your PayPal account, withdrawing to your own bank account and transferring your friends/clients money (less fees).

    Though I have a feeling that if doing this you would need to register the agency/marketplace as a separate entity entirely so it may or may not be viable depending on what you get out if it.

    Like I sad though I'm not certain of the ins and outs of such an operation, and I would strongly advise seeking professional advice to make sure everything is as it should be before continuing.

    If you do get confirmation either way regarding this please post back to let us know as it may help others who may come across it in the future.
  5. Sc0tty

    Sc0tty

    Joined:
    Jan 19, 2010
    Messages:
    701
    You have to ask yourself why is his account limited? Its because he is dropshipping. Why would you want to put yourself as risk of being restricted?

    He will have some criteria he has to meet before he can get his account back, tell him just to get that done. I had it when I started. Just get him to meet that criteria.
    Last edited: Apr 20, 2016
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