Aliexpress sellers charging UK VAT

[paulears]

This caught me today - ordering half a dozen top-up products and at checkout, 20% VAT applied with a note that they have to do this from the 1st Jan - clearly they're not all doing this, but I'll be intrigued to see if this order arrives without the usual VAT being applied by the carrier this end - which to be fair, is a faff. However - how on earth do you get a VAT invoice from a chinese seller!

 

[Mr D]

This caught me today - ordering half a dozen top-up products and at checkout, 20% VAT applied with a note that they have to do this from the 1st Jan - clearly they're not all doing this, but I'll be intrigued to see if this order arrives without the usual VAT being applied by the carrier this end - which to be fair, is a faff. However - how on earth do you get a VAT invoice from a chinese seller!

Usually you ask for a VAT invoice.

If you are lucky it will have a different VAT number on it than the dozens of other different Chinese sellers. If really lucky it will be a kosher VAT number registered to the business you are dealing with!

Have heard stories of companies being surprised to find their VAT numbers being used by overseas sellers to fool customers into thinking the overseas seller is VAT registered.

 

[paulears]

Yep - no response yet of course, I wonder if it's crafty way to generate 20% extra. It's always tricky now to even reconcile the usual VAT payments required by Fedex, UPS etc - as the details are always the freight forwarder, so sometimes even working out who the package actually comes from is impossible till you open it!

 

[DefinitelyMaybeUK]

20% VAT applied with a note that they have to do this from the 1st Jan

Presumably this is new "order less than £135" rule? If it's over that though, will tariffs be covered by the seller or will that be down to you plus a likely handling fee?

 

[paulears]

Their responses so far - what VAT, we don't charge VAT - VAT is Aliexpress problem not us - We don't have number. So clearly at scam to watch out for.

 

[jimbof]

Their responses so far - what VAT, we don't charge VAT - VAT is Aliexpress problem not us - We don't have number. So clearly at scam to watch out for.

When you say "scam to watch out for" - isn't it just similar to Amazon, who are going to be enforcing this I think for marketplace sellers.
Did you actually go through with the transaction? If it really is being added by the checkout, is there any way to avoid it?
Doesn't really sound like a scam to me. Unless you regard all taxation as theft as some do!

 

[paulears]

It seems that the supplier is innocent, Aliexpress are adding VAT at 20% and I got an invoice from them that shows UK VAT at 20% but says GB VAT registration pending) so Aliexpress intend to add VAT at their end, so import at our end should be restriction and surcharge free, and of course the under-declaring of price to reduce import VAT will stop. It doesn't seem to apply to orders over a certain value - I had a couple of 600USD orders yesterday that were charged as normal, and a very cheap cable for $9 also had nothing added. A 50USD order got 20% added as did one for 80USD - so it's worth watching out for. It would be nice if ebay followed suit.

 

[jimbof]

It would be nice if ebay followed suit.

It looks like they will, seems they're all being bound to do this.
https://sellercentre.ebay.co.uk/global-sales/2021-vat-changes

 

[paulears]

This will actually help me as some of the things I sell are sold direct on UK ebay from china, and they look cheaper - so with my price including VAT, I look more expensive, and the VAT charged on entry only is found out by the customer when they have to pay it, so this might even the playing field up a bit - maybe there are some implications I've not seen, but we'll have to wait and see.

 

[DefinitelyMaybeUK]

Aliexpress are adding VAT at 20%

...but as you're a VAT registered business customer, isn't the process now that orders under £135 are VAT 'reverse charged' to you and if over £135 you shouldn't be paying VAT to the seller anyway and dealing with that on import as per this:

gov dot uk/guidance/vat-and-overseas-goods-sold-directly-to-customers-in-the-uk

 

[paulears]

Yep - I just want to have a way to claim that VAT back, and hopefully Aliexpress will eventually get their UK VAT number.

 

[2JP]

https://www.gov.uk/guidance/vat-and...customers-in-the-uk-using-online-marketplaces

I guess the online marketplaces have had to implement this as best they want to (though the likes of ebay and aliexpress, which are huge global online marketplaces, surely should have registered for UK VAT and put things in place ready for 1st Jan).

If you are buying as a UK VAT registered business then it looks like marketplaces are not giving you the option of postponed VAT accounting (or deferred, etc). The marketplace will just charge the VAT if the seller claims they are not collecting it (i.e. not UK VAT registered) for sales under £135. As you say, the VAT amount charged then surely has to be produced to you written on some form of VAT invoice with the UK VAT number of the entity that charged the VAT (the marketplace or the seller), so that you can support a claim for the VAT paid on your VAT return.

Ebay's implementation to sellers, linked above makes sense. A non-UK VAT registered foreign retailer would not have to register for UK VAT and just creates their ads at '0%'; ebay itself then collects the UK VAT. A UK VAT registered foreign retailer on ebay could choose whether to collect VAT themselves ('20%') or let the marketplace do it ('0%').

I just wonder how many Chinese sellers are going to post ads fraudulently at '20%' but not actually be UK VAT registered and not submit any VAT return or VAT payment to HMRC. i.e. I wonder how effective these VAT dodging efforts are going to be in reality.