Adding VAT to prices

Hi,

I was looking for some advice from those sellers who are already VAT registered.

I will be registering for VAT this week but I am confused as to how PPH works in regards to charging VAT.

A ticket has been raised with their support team but they are painfully slow so I need some further advice if possible.

So, I am a seller and my offer is priced at £20. There is then a fee of £1.80 deducted from this when the invoice is paid. 

In conversations that I have had with PPH so far, they are saying that I have to add VAT onto the initial offer price (of course, I will add that VAT will be charged in my offer description). However, PPH doesn't allow you to increase the price in increments of £1. Therefore, my £20 offer would have to become £25, which is £1 more than it would cost buyers if I added 20% to the initial £20. What I also find wrong is that PPH will deduct their fee from the figure that includes VAT, so, in actual fact, if I was to charge a buyer £25 which is inclusive of VAT, a total of 29% is deducted (9% PPH fee and 20% VAT) which leaves me with less money than I am taking home per order at the moment. I would have thought that PPH would only be allowed to deduct their fees from the initial offer price of £20 and not the total price of £25 which includes VAT.

Is this right? I would have thought that PPH should not be allowed to deduct any fees from tax as it then means that sellers are then having to cover the cost of some of the VAT. Also, while PPH are saying that VAT has to be added to the initial proposal/offer I have queried why there is an option to add tax when an invoice is raised...what is the point of this if it has to be added beforehand?

Essentially, I would prefer to keep my offer at £20 and then add VAT at the end rather than offering a price of £25 which is inclusive of VAT as I think that buyers will more than likely choose someone who charges £20 instead of £25, even if they can claim back the VAT but they will still be paying £1 more per order.....does anyone have any advice as it all seems extremely wrong to me.