Chinese eBay sellers with UK based stock

[moviezone]

Despatching from outside the UK is not as much of a problem (Sales are much lower), the major issue is stock here in the UK (which appears to be UK Sellers but they are not) which is under declared on import and then transferred for fulfilment somewhere in the UK (Be that an international student at Uni, FBA centres or other commercial fulfilment co's.) Not to mention circumvention of CE laws etc.
.
If you have an issue from overseas and they have stock in the UK, check them out, buy something and ask for a VAT receipt - If they are trading inside the UK (and the product arrived from inside the UK) and they are over the VAT threshold (Which is often easy to tell just by feedback) then collate the information and report them to R&C.
Without doubt there is a black hole but if everyone checks their own sector R&C will act on the information, having spoken to them they can now inform Amazon and Ebay of such sellers and they are working with both to remove such accounts or correct them and claim back tax (Which is like a thorn in the side of the sellers) they have to start all over again (Some have very big accounts and are still getting away with VAT input and output and Duty, some just disappear). Back search in Google Address, Fake company ID's and VAT Numbers, this shows other related accounts in other channels - report them all on one go.

Amazon have stepped up a little ensuring the correct trading address is there for all to see, so you can verified accounts are registered in China/HK but are shipping from FBA UK - and easy spot.

I can not post links but search "Report VAT Fraud" on google and get cracking it could be worthwhile....

 

[japancool]

Despatching from outside the UK is not as much of a problem (Sales are much lower

It's a problem for me, and therefore that's what I care about.

 

[Beachbum]

The BBC are doing a piece on eBay & Amazon VAT Fraud. Please contact https://twitter.com/simontulett if you want to take part

 

[Karimbo]

The BBC are doing a piece on eBay & Amazon VAT Fraud. Please contact https://twitter.com/simontulett if you want to take part

nice, panorama produces some very interesting shows. When can we expect to see it aired?

my general take is that ebay want their site to be the cheapest possible place to buy things online. Over the years they've increased their fees over and over again. If the also enforce VAT compliance it will see their prices balloon and make them uncompetitive against other retailers. It's just not in their interest to enforce VAT compliance, they're doing the absolute bare minimum required by law.

In fact when you interview an eBay representative on the show, eBay will say "we're doing everything required by law to enforce compliance, we're meeting all HMRC guidelines"

 

[Beachbum]

Very soon

 

[Beachbum]

Oh BTW - I've just got back from Brussels - had meeting the Head of VAT for EU.

http://www.baypayforum.com/news-fro...t-panelist-bio-conclusion-baypay-sept-16-2014

Presented him and his team with the facts of what HMRC have let happen in the UK and its effects on every EU members state.

Went down very well. Meeting lasted 3 hours.

Now looking at EU to sort this out. EU can hold HMRC to account for this.

Some very interesting changes to EU VAT Laws coming in - anyone sending goods into EU will have to be registered for VAT from 2020. Bit like VAT Moss but for physical goods.

Removing the LVCR - low-value consignment relief. Everything will be charged at 20% VAT no matter what value.

Got a meeting in House of Lords tomorrow too

 

[japancool]

Some very interesting changes to EU VAT Laws coming in - anyone sending goods into EU will have to be registered for VAT from 2020. Bit like VAT Moss but for physical goods.

This is not good.

Removing the LVCR - low-value consignment relief. Everything will be charged at 20% VAT no matter what value.

This is good. Of course, the people posting into the UK will simply carry on underdeclaring the value of goods.

 

[Pish_Pash]

my general take is that ebay want their site to be the cheapest possible place to buy things online. Over the years they've increased their fees over and over again. If the also enforce VAT compliance it will see their prices balloon and make them uncompetitive against other retailers.

it's a festival of win for the Govt though.....more tax take plus a healthy bit of (instant) inflation to stave off the never ending spectre of deflation

 

[boring-friday]

Makes no sense to me how/why hmrc is such a joke. Its not just chinese sellers, loads of uk sellers are doing over the 85k a year or whatever it is with no vat number, I'd say 80% hitting over 85k don't have a vat number atleast, expect out of the ones who do half of them aren't paying anywhere near enough.
In the US paypal notify the taxman when you hit over $20k in 12 months, you can do 20x that here and not hear a peep, might get asked to submit business information but you can just put self employed and they can't check anything anyway.

Really don't get the issue, pay someone minimum wage to check for sellers over the threshold, ask if they have a vat number, if not knock on their door, 1 day of work at the most for someone who's dodging £15k+ a year in vat let alone income/cooperation tax aswell

 

[RPower]

Hey,

If this is relevant, a BBC business journalist is looking for UK online traders affected by foreign firms avoiding VAT on sales into the UK.

If you'd be interested in a radio and/or print interview please get in touch with me and I'll pass your info on.

Thanks

 

[Karimbo]

it's a festival of win for the Govt though.....more tax take plus a healthy bit of (instant) inflation to stave off the never ending spectre of deflation

Its correct in theory, but governments are at the mercy of multinational corporations to some extent. They dont want to clamp too hard in the risk of scaring away foreign investors. A few years ago there was a lot of reporting about a multinational coffee chain declaring tiny amount of corp tax by allegedly hiding away their profits using some intra EU loophole.

Truth is HMRC can clamp down and enforce more rigid accounting standards so profits made from UK revenue are reported as UK profit. But I think HMRC is a bit pragmatic and happy to just take in VAT revenue and turn a blind eye to corp tax dodge

HMRC would also much prefer to have one VAT regged multinational dominating the market than have lots of independent cafes and patisseries in it's place providing a living for a owner operator. The cafe might never meet the VAT threshold and have no corporation tax anyway because all revenue is spent on wages, overheads and expenses.

n.b. plus loads of cash businesses tend to not declare a lot of the cash.

Small indies might also be entitled to small business rate relief and other benefits further reducing the tax revenue collected.

 

[Pish_Pash]

This just in...

"UK losing millions in VAT from non-EU sellers on Amazon and eBay
Both firms say they have no obligation to police VAT compliance by sellers as Brussels warns of huge rise in goods shipped with value under-declared"

http://www.theguardian.com/business/2015/nov/01/uk-losing-millions-vat-non-eu-sellers-amazon-ebay

...what's that I hear....aah, it's the sound generated from the collective shrug of their shoulders.

The Guardian asked for a comment from an HMRC VAT inspector, but...

 

[Pish_Pash]

and another item (infers Amazon & Ebay may be liable for uncollected VAT on their marketplaces ...now that's the type language I like to hear!)....

http://www.bbc.co.uk/news/business-34650014

 

[Beachbum]

Tune into Radio 4 PM program 5pm today

 

[MOIC]

98% of sellers (an uneductated guess) who evade VAT and under declare (UK sellers, more so than Chinese sellers) would not know how to find Radio 4.

Who is it aimed at??

 

[Beachbum]

Its aimed at raising awareness at government level and adding to pressure

By all accounts eBay have already had a staff meeting about it today.

 

[MOIC]

Its been going on for the past 50 years.

 

[Karimbo]

removing the vat free value could completely wipe out cheap imports direct from china through websites like aliexpress,deal extreme etc. The VAT/customs handling charge by royal mail would be huge and more than the value of items.

Also, declaring proper VAT number only solves half of the problem. Foreign based sellers have no loyalty to our country, there's no guarantee that they will actually hand over the VAT to HMRC. They could just burn through lots of VAT numbers, under declare VAT for years and years until they get caught with an inspection, then just pack up and run and set up a new VAT number.

ive been in business (vat registered) for 2.5 years now. Never had any inspections or a peep from HMRC at all.

 

[Beachbum]

The EU have already proposed new VAT laws for physical goods – just like the VATMOSS Law for downloads.

VAT will be paid to each member state the goods are sold in. If a Chinese seller distance sells goods into UK, they will have to register for VAT and pay VAT to UK VAT man.

EU say new laws are pencilled to come into force 2020.

So we only have 5 years of VAT Fraud left

i think they are going to introduce a barcode type system - which registers all imports by NON EU sellers. No barcode - no entry

They are removing LVCR - so everything will have VAT charged it no matter what value

 

[Beachbum]

Good to have Lord Lucas backing from House of Lords.

Classic quote from Lord Lucas twitter account:

https://twitter.com/LordLucasCD

“The truth of this is that HMRC is allowing UK businesses to be destroyed, and Amazon+EBay are, as ever, shitpuffins”

 

[TMGG]

ive been in business (vat registered) for 2.5 years now. Never had any inspections or a peep from HMRC at all.

Why would you expect one in 2.5 years? Are you turning over millions?

But HMRC can't pull out their finger for traders evading millions in front of their face right now.

 

[hahihahi]

I'm still a little confuse after reading through pages of discussion regarding this topic...basically I thought:

Type 1 - foreign sellers buying from China and importing all the products to their local UK warehouse. Start selling then.

Type 2 - chinese sellers sell and ship from China.

Type 3 - chinese sellers sell from China but ship from UK warehouse where they already shipped everything to UK in advance.

Type 1 and 3 must pay VAT and all the importing duties but cheaper in overall logistics because they are shipping in bulk and then individually in UK only.

Type 2 does not pay any VAT because UK people are considering buying from China and not UK locally, but chinese sellers pay more in shipping individual product from China to UK.

To summarize them, it seems to me that foreign and chinese sellers are competing equally in Type 1 & 3. Any comment please?

 

[mtools]

I'm still a little confuse after reading through pages of discussion regarding this topic...basically I thought:

Type 1 - foreign sellers buying from China and importing all the products to their local UK warehouse. Start selling then.

Type 2 - chinese sellers sell and ship from China.

Type 3 - chinese sellers sell from China but ship from UK warehouse where they already shipped everything to UK in advance.

Type 1 and 3 must pay VAT and all the importing duties but cheaper in overall logistics because they are shipping in bulk and then individually in UK only.

Type 2 does not pay any VAT because UK people are considering buying from China and not UK locally, but chinese sellers pay more in shipping individual product from China to UK.

To summarize them, it seems to me that foreign and chinese sellers are competing equally in Type 1 & 3. Any comment please?

Not necessarily. They could be paying some VAT, but most likely they are not paying the correct VAT, most likely by under declairig the value of the imports. This is pretty rife and almost all supplies seem to offer this as standard, I have to encourage my suppliers to declare the correct value, as j am vat registered! If you are vat registered the value is irrelevant, I.e you claim back the vat charged if it's £1 or if it's £10. If you are not, you obviously can't claim it back so then it is in your interest to under declair the value.

 

[epicj]

As mentioned above, the Chinese/foreign sellers under declare the goods value on the way in, 1st VAT fraud.

And then more importantly they don't pay VAT on sales made directly in the UK, 2nd VAT fraud, this is the biggest part of the fraud.

No difference between foreign sellers and Chinese sellers, both are non-UK.

 

[Sheng]

Type 2 does not pay any VAT because UK people are considering buying from China and not UK locally, but chinese sellers pay more in shipping individual product from China to UK.

Shipping prices from China to the UK are pretty competitive, so I believe the shipping cost is similar to UK internal shipping prices. However, it's the shipping speed (1-3 weeks) that's the main problem. The majority of customers don't want to wait that long.

 

[Jayser100]

You are missing a very important point. Many Chinese factories are using Amazon FBA. Game changer, right? They can ship the product to an Amazon warehouse in bulk, and using Chinese shipping agents who are generally much cheaper than UK couriers. In addition, don't forget, you can use Amazon FBA to fulfill eBay orders too.

It would be interesting to know if they are paying all their due taxes to HMRC as a result because I strongly suspect they should be paying some sort of tax on sales that are fulfilled from within the UK (and indeed Eu), as correctly mentioned by another post above.

Let me show you something. Consider this product:

http://www.amazon.co.uk/THG-Faddish...1789&sr=8-17&keywords=cheap+sports+sunglasses

This is a Chinese factory, using FBA to sell on Amazon. I purchased a pair of their sunglasses and it confirmed my suspicions that they do not comply with ISO 12312, which is the European standard for eyewear. I complained to Amazon about this company and their products three years ago. As you can see, nothing was done. The only conclusion you can draw from that is that Amazon don't really give a stuff about Chinese factories selling goods on their ecommerce sites that are illegal, so long as they make a few bob out of it. Those of us who do everything by the book have no choice but to simply put up with it.

If you read some of the reviews below the product you will see the issues with this type of product are not just about conformity.

 

[japancool]

Amazon don't give a stuff about very much. They refuse to comply with local legislation and if they see Amazon vendors selling successful products, they source and sell those products directly themselves. You don't expect them to care about a minor little thing like paying taxes, do you?

 

[Jayser100]

If you write to their legal department, they do listen, but they don't always act. I did score one significant victory, however, when Amazon decided to list all of the sunglasses they buy from UK vendors, on Amazon.com . This was instantly a huge problem on different levels - firstly, you need a special FDA licence to sell sunglasses in the United States; it is highly unlikely that most of the companies supplying Amazon have a licence, hence they instantly dropped a number of UK companies on the wrong side of the US law, without their knowledge. Secondly, if you sell products like sports sunglasses in the US, you need to make sure you have extra insurance because out there, you will get sued at the drop of a hat if a mishap occurs. I actually pay three times the level of insurance I would if I wasn't selling in the US. Again, by simply dumping these products on Amazon.com without even consulting the suppliers first, Amazon were exposing their vendors to potentially horrendous legal issues.

I wrote a lengthy message to Amazon's UK legal department about all this and low and behold, the products disappeared from Amazon.com. Amazon always stress they won't contact you to tell you of their decision on such matters but in that case I know they were 'listening'.

 

[hahihahi]

In this case I would say that in order to compete with any reseller, innovation of products and better quality must be considered to create a better branding. It is easy to say but I still think that this could be done based on my experience and most important is to have built a better relationship with all your suppliers. Let them know your issues and ask for their advice.

 

[Jayser100]

Fortunately we already have that edge and I am more than happy with the quality and USP's of the products we have. In reality there is not much you can do to tempt away those customers who will buy anything that looks like a pair of sunglasses so long as it is the cheapest price, on Amazon (and eBay). Although we are discussing it here, and I have had a bit of a whinge, in truth I don't worry myself too much about what these guys are doing anymore. So long as we keep our house house in order we will continue to make good sales regardless of what the Chinese 'cowboys' are doing. There is still a good market for people who will pay a bit more for a quality product, that originates from a proper, well-established and fully identifiable UK business.

 

[Michael.han]

I'm still a little confuse after reading through pages of discussion regarding this topic...basically I thought:

Type 1 - foreign sellers buying from China and importing all the products to their local UK warehouse. Start selling then.

Type 2 - chinese sellers sell and ship from China.

Type 3 - chinese sellers sell from China but ship from UK warehouse where they already shipped everything to UK in advance.

Type 1 and 3 must pay VAT and all the importing duties but cheaper in overall logistics because they are shipping in bulk and then individually in UK only.

Type 2 does not pay any VAT because UK people are considering buying from China and not UK locally, but chinese sellers pay more in shipping individual product from China to UK.

To summarize them, it seems to me that foreign and chinese sellers are competing equally in Type 1 & 3. Any comment please?

UK law, If product price is over £15 pound, even they are from china by post, still need pay vat. HMRC can use label details call the customer check the price is right or fake.

 

[Karimbo]

I just bought an iPad case from an ebay seller besdta_top who has 38722 positive feedback in the last 12 months (no question they have exceeded the VAT threshold)

They have a VAT number on the account, I asked for a VAT receipt and they had the gall to say to me that they will need to charge me 20% more for it. They are so oblivious to this that they don't even know that it's probably in their interest to just issue the VAT receipt and take a "hit" than to ask for more money and blow their cover.

 

[crelding]

There seems to be a lot of people annoyed about this (myself included). Is there anything we as a group can do to try and fight this? I'm all for a good old rant, but I would also like to see some kind of solution.

 

[japancool]

UK law, If product price is over £15 pound, even they are from china by post, still need pay vat. HMRC can use label details call the customer check the price is right or fake.

Most of the time, HMRC don't bother and most customers, if confronted, are unlikely to say the price is fake if it saves them money.

The law only disadvantages the honest.

 

[japancool]

I just bought an iPad case from an ebay seller besdta_top who has 38722 positive feedback in the last 12 months (no question they have exceeded the VAT threshold)

They have a VAT number on the account, I asked for a VAT receipt and they had the gall to say to me that they will need to charge me 20% more for it. They are so oblivious to this that they don't even know that it's probably in their interest to just issue the VAT receipt and take a "hit" than to ask for more money and blow their cover.

So after 22 pages, newspaper articles about it, naff all has changed. Hey, we're talking about a government that did a deal with Google for a fraction of the tax they owed, what do we expect really?

 

[Karimbo]

IMO, HMRC just needs to get heavy handed. Just take off VAT off payapl for all sales where the seller is "VAT registered". Take off the appropriate amount as per FRS, if they are on standard rate then the actual VAT can be calculated on VAT return (minus adjustment for VAT collected at source via paypal).

 

[Chris34]

IMO, HMRC just needs to get heavy handed. Just take off VAT off payapl for all sales where the seller is "VAT registered". Take off the appropriate amount as per FRS, if they are on standard rate then the actual VAT can be calculated on VAT return (minus adjustment for VAT collected at source via paypal).

I wouldn't even call that heavy handed, I'd call it fair for all. It would boost tax take massively and it would be immediate, they would be able to see if a VAT increase increases the tax take or decreases it by the day if they wanted to. Dare I say it they could even then start to charge higher tax for online vrs offline if they wanted to, but that's another discussion.

So if one person has a Paypal account in China or any other country and sells something to somebody in the UK then they are automatically charged VAT.

If a UK seller sells an item and their turnover (via Paypal) is above the VAT threshold then they are automatically charged VAT and if they are not VAT registered then obviously they will be forced to register.

Seems pretty straight forward to me.


Chris.

 

[Pish_Pash]

There's so much low hanging fruit to go for (from HMRC's perspective).

A quick example of how to flush out the weaker ones....

"Hello is that the BBC/Sky/ITV/CH4 news...please have your news gathering units assembled outside Amazon's fulfilment centre in Milton Keynes tomorrow morning...we're going in to seize goods from VAT fraudsters"

End result? The news crews would be all over it - massive nationwide/global publicity that HMRC are now impounding everybody's goods for VAT fraud ....that'd focus some dodgy sellers' collective minds.

I mean seriously, what on earth are HMRC up to ....this is 'shooting fish in a barrel' type stuff.

 

[mtools]

I wouldn't even call that heavy handed, I'd call it fair for all. It would boost tax take massively and it would be immediate, they would be able to see if a VAT increase increases the tax take or decreases it by the day if they wanted to. Dare I say it they could even then start to charge higher tax for online vrs offline if they wanted to, but that's another discussion.

So if one person has a Paypal account in China or any other country and sells something to somebody in the UK then they are automatically charged VAT.

If a UK seller sells an item and their turnover (via Paypal) is above the VAT threshold then they are automatically charged VAT and if they are not VAT registered then obviously they will be forced to register.

Seems pretty straight forward to me.


Chris.

This really wouldn't work. if the goods are coming from outside Europe the seller has zero responsibility to pay VAT to HMRC. It is responsibility of the buyer when it comes into uk, which obviously never happens as goods are famously undervalued. So any non-UK based companies are immediately out the question. Chinese companies that fulfill from UK are an easier option, but the easiest is anything done FBA. As someone said above it would literally be the easiest one to police and probably yield most of return for least effort. Just make any fulfilment centre automatically debit 20% of sales when turnover is above a certain rate for the 6 months (as is the law at moment for registering for VAT), also I believe it's more difficult to open up an FBA account that eBay account, so would be relatively simple to keep on top of companies having several accounts / opening new accounts to keep below the threshold

 

[GraemeL]

The Chancellor has today made specific mention of sellers using Ebay and Amazon who have stock in the UK but are not paying VAT in his speech to the House of Commons.