Fake UK sellers (china) on eBay scam?

Discussion in 'Ecommerce Forum' started by Worzel, Mar 19, 2013.

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  1. jashry

    jashry UKBF Newcomer Free Member

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    Yes, but it seems like HMRC does not care, the Daily Mirror ran an article on this and nothing ever came of it. It will only become a level playing field when the HMRC realise that ebay is fully dominated by overseas sellers defrauding them of VAT which I think will take a good 5-10 years as that's normally the speed at which the HMRC act.

    There is a simple solution to this, the HMRC could force ebay to provide sales data and STOP overseas sellers fulfilling order from the UK to have payments go into an overseas paypal account. The way ebay facilitates this fraud is unbelievable !
    Posted: Jul 2, 2013 By: jashry Member since: Dec 23, 2009
  2. greengecko

    greengecko UKBF Newcomer Free Member

    254 38
    On a competitor of ours we actually went a little further and found out the exact fulfillment centre they were using, we also found there VAT number for imports (of course they were refusing to issue VAT receipts).

    Informed Trading Standards who said nothing they could do, off to the VAT man that told me they would investigate - I handed absolutely everything to them on a plate.

    Result : One year on, nothing has changed :rolleyes:
    Posted: Jul 2, 2013 By: greengecko Member since: Feb 3, 2010
  3. jashry

    jashry UKBF Newcomer Free Member

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    How frustrating is that ? I handed over a list of 200 sellers to the HMRC and this involved a considerable amount of work on my part, again what was the consequence ? Absolutely nothing, all 200 sellers are still selling and defrauding HMRC of VAT, but it seems like they just don't care. This is a serious problem not only for the HMRC but UK as a whole, the fact that these sellers are generating £millions in sales and not paying any tax in the UK is an economic disaster and is no different to arbitrage (in this case illegal arbitrage). The end result will be that UK sellers will start doing exactly the same thing, they will set up in tax havens and run their business from there and not pay any VAT on sales which originate from the UK - surely this is the only way to make money if you're a big seller on ebay or amazon ? May be Dubai can become popular again, you might as well set up there and run your whole business from there.

    I wonder if the HMRC bothers to read these posts ? It would be interesting as when the level of fraud is publicised they will look like idiots for ignoring such posts.
    Posted: Jul 2, 2013 By: jashry Member since: Dec 23, 2009
  4. 14Steve14

    14Steve14 UKBF Enthusiast Free Member

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    This may seem like a silly thing to say, but have you tried having a word with you MP. They might not want to know, but with the current tax avoidance schemes and the like in the press, they might take a bit of notice. if nothing else, it might get you to meet your MP.

    You could also phone up a different newspaper and see what they think.
    Posted: Jul 2, 2013 By: 14Steve14 Member since: May 18, 2010
  5. jashry

    jashry UKBF Newcomer Free Member

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    Thanks for your suggestion, but like trading standards they will fob you off and tell you to contact HMRC. MPs are probably worse than the HMRC, unless there's an expense claim in it for them most of them don't want to know. I tried to contact Sarah Tether once and she fobbed me off, she seemed like such a nice person on Question Time and the letters she sends in the post, but when you actually need help they don't even bother replying. She lost my vote !
    Posted: Jul 2, 2013 By: jashry Member since: Dec 23, 2009
  6. theglowhouse

    theglowhouse UKBF Newcomer Free Member

    3 1
    First post here. I've been searching google for answers on Chinese Amazon FBA sellers not collecting VAT on belhalf of HMRC. This was right up there in google, hence me joining the site!

    What an absolute joke of a situation this is for all affected, I'm not reliant on Amazon or Ebay, but a few weeks ago I decided to give FBA a go. I noticed no matter how much I lowered my prices another seller would go even lower. Interesting I thought at the time! Decided to purchase this product from this particular competitor and I took delivery last week.

    The main reason for the purchase was to find out who it was, I know all the UK players of my sector. On opening the amazon box, I was disappointed not to find any information at all about the seller, just the standard Amazon delivery note.

    By the way, it's EU law to display the importer/seller name and address on the packaging of a Toy along with the CE approval stamp, I couldn't see his name and address so I decided to contact the seller via Amazon to ask for a VAT receipt. He got back a few hours later to tell me he is a Chinese seller and can't give me a VAT invoice, however he sent me a standard 'commercial invoice'.

    The guy is also on ebay, he is using Amazon FBA to sell on Amazon and ebay UK, DE and USA, probably other markets too. He is generating in excess of £1 million sales from UK customers alone and he is obviously not paying VAT.

    I just wanted to highlight that it won't be long before ALL Chinese sellers start dumping their stock into Amazon FBA or similar fulfillment services. So instead of waiting 2 weeks for delivery, you'll be able to get it next day from these Chinese sellers, gift wrapped with all the bells and whistles.

    I've only recently realised that you can use FBA for Ebay too. I think they call it multi seller channel over at Amazon. Great idea in principle.

    Anyway my rant is purely on the VAT element, I can't complain too much about the international competition.

    I was going to give HMRC a call this week and give them all the information I had on this Chinese seller, but reading the above comments, it hardly seems worth it.

    The UK government have got it all wrong and I was contemplating telling my MP about this and even directing him to this thread, but that idea seems to have been tried already. Why don't the UK government at least make it the responsibility of the Fulfillment centre to ensure the seller is VAT registered? How difficult can this be? Obviously Amazon/Ebay don't give a stuff. Am I right in thinking since Dec 12, nobody can sell a £1 of stock without being VAT registered? If that is the case then wtf?

    Apologies for the poorly structured post, it's purely frustration.

    In light of this discovery I've resorted to some unsporting tactics myself and as a result have temporarily had this seller kicked off Amazon because his stock is not UK compliant. Whether this temporary ban will be lifted again is another matter, but nevertheless a partial victory!
    Last edited: Jul 2, 2013
    Posted: Jul 2, 2013 By: theglowhouse Member since: Jul 2, 2013
  7. wayzgoose

    wayzgoose UKBF Enthusiast Free Member

    808 121
    Might be worth passing all this information on to the FSB - see if they can be pulled onto the case.
    Posted: Jul 2, 2013 By: wayzgoose Member since: Oct 9, 2007
  8. jashry

    jashry UKBF Newcomer Free Member

    29 0
    Hi Glowhouse

    Thanks for your post and your response it might sound like a rant but you've touched on two important areas:

    1) they're not paying VAT which is the main area of discussion here
    2) they have no certification, actually for all toys you need EN certification not just CE and I bet they don't have this certification either which means the toy is almost certainly a danger to any child. This is a trading standards issue but again they can't do anything more than to contact amazon but it seems like you've already and the seller temporarily banned, bit don't worry he will be back within 7 days after he writes his business case to amazon who will reinstate his account promptly.

    I know I said that talking to HMRC and the MPs is a waste of time, however I would still advise you to speak to them as there must be someone out there who cares and can so something, I can't believe they're all in it simply for the money ?

    I'm glad you found this post, hopefully the HMRC will also take some notice before they get embarrassed in the national tabloids again !
    Posted: Jul 2, 2013 By: jashry Member since: Dec 23, 2009
  9. TODonnell

    TODonnell UKBF Ace Full Member

    1,405 214
    Well, if you can't beat them, join them! Somehow.

    There's the law and then there's what's actually enforced. As your Chinese competitors know well.
    Posted: Jul 4, 2013 By: TODonnell Member since: Sep 23, 2011
  10. AbsolutNut

    AbsolutNut UKBF Regular Free Member

    173 39
    Yes there is a real risk of the UK driving home grown sellers overseas in a bid to compete and level up the playing field. Let's hope HMRC et. al. get their act together and soon. I somehow doubt it though.
    Posted: Jul 8, 2013 By: AbsolutNut Member since: May 17, 2010
  11. jashry

    jashry UKBF Newcomer Free Member

    29 0
    HMRC doesn't care. I think many sellers will eventually go abroad and just use UK as fulfilment as the Chinese do. I think they'll realise after 10 years that their revenues have fallen and then they'll do something about it.
    Posted: Jul 8, 2013 By: jashry Member since: Dec 23, 2009
  12. Abul Vilerz

    Abul Vilerz UKBF Newcomer Free Member

    2 0

    I have noticed the same scam as you on a lot of products, be careful is the only advice I can give.

    Posted: Jul 16, 2013 By: Abul Vilerz Member since: Jul 3, 2013
  13. jashry

    jashry UKBF Newcomer Free Member

    29 0
    This is VAT fraud, it's a simple as that. If you are a UK seller you will get VAT and HMRC audits frequently, however if you are a Chinese seller selling from a fulfilment centre in the UK then they won't even bother chasing you. I emailed a massive ebay seller yesterday asking them if they would provide a VAT invoice, and his response was that they are not VAT registered, yet, he turnover over £10k per day ! I would love to state his ebay user ID on this forum but I'm not sure I'm allowed to.
    Posted: Jul 16, 2013 By: jashry Member since: Dec 23, 2009
  14. devereux

    devereux UKBF Newcomer Free Member

    5 5
    Hi, I have just registered so that I can contribute to this thread.
    I made a search for 'Chinese sellers evading VAT' and ended up here.

    I am sooo angry at what is happening on Ebay & Amazon. We are a small business, employing local people and paying all our VAT, corporation taxes etc Our listings are constantly been undercut on Amazon by cheap copies (even though we make them ourselves and have registered trademarks etc)

    Ebay is full of chinese sellers selling similar items who are turning over fortunes and claiming to be UK based but not paying VAT.

    Ive reported this to ebay (pointless - didnt even get a reply) and Hmrc (nothing!!)

    I want to suggest that we really do something. I am probably not the most articulate person but I can build websites and have a background in Marketing.

    We should form a group, contact our MP's Start petitions etc I feel really strongly about this and hope that we could all work together.
    Posted: Jul 18, 2013 By: devereux Member since: Jul 18, 2013
  15. houdex-org

    houdex-org UKBF Newcomer Free Member

    1 0
    Hello, this is houdex.org, i joined this forum to contribute with everything i can.

    First of all i want to say Ebay is full of chinese sellers selling similar items as Uk stuff. What to do ? I agree with Devereaux, we should form a group and make a petition maybe this way we can solve something... Greetings to UKbusinessforums from Houdex.org , keep up the good work!
    Posted: Jul 18, 2013 By: houdex-org Member since: Jul 18, 2013
  16. jashry

    jashry UKBF Newcomer Free Member

    29 0
    The only way to really pursue this is to get it on the front page of the newspapers like The Times ..... It's so easy to find out how much revenue each seller is generating and therefore how much VAT fraud they are committing and the HMRC could also do this, however they refuse to take any action. If we go to the press and have a headline which states "HMRC ignores £3bn worth of fraud each year" facilitated by Ebay then perhaps the HMRC and Ebay would do something. Ebay haven't had any bad press about this issue either, as soon as they have some bad press they'll do something about it. I suggest all of us contact the national newspapers and direct them to this post, something needs to be done about this quickly
    Posted: Jul 18, 2013 By: jashry Member since: Dec 23, 2009
  17. dooyoo

    dooyoo UKBF Contributor Free Member

    68 3
    Do not forget Amazon............ I was looking to buy mp4 watch for my nephew. eBay and Amazaon are full of Chinese selling those things.
    And only today I noticed .......it says UK stock, UK.......but actually it is in China.
    Last edited: Jul 18, 2013
    Posted: Jul 18, 2013 By: dooyoo Member since: Jul 6, 2013
  18. 14Steve14

    14Steve14 UKBF Enthusiast Free Member

    718 115
    I love this thread and have come across a similar thing with an ebay seller. What I found even worse was that the seller had multiple user names. These users were selling the same items, had identical listings, and even the feedback given was the same, and comments to feedback used the same terminology.

    So how do we get national newspapers to take notice.
    Posted: Jul 19, 2013 By: 14Steve14 Member since: May 18, 2010
  19. jashry

    jashry UKBF Newcomer Free Member

    29 0
    I think it's relatively simple, you can call national newspapers and tell them what's going on. If a number of us do this then they will take notice. By the way having multiple accounts is not the issue, the issue is that these sellers are opening multiple accounts to defraud the HMRC from VAT and when the HMRC reports "one" of the account, the seller still continue to trades on the other accounts they have so they never loose any sales. The farce is that ebay know what one seller has multiple accounts but they are actually facilitating the fraud and allowing it to happen, as soon as this gets out in the press I guarantee you that ebay will stop them from selling as it will give them really bad publicity. The current CEO of ebay has tried so hard to get rid off the "bucket shop" image of ebay where the public generally think that the stuff being sold on ebay is either junk or stolen that I know he will take notice of this thread and any articles in the paper, as they do not want to destroy the image they have been trying to build.

    Amazon is also facilitating this fraud, they are making it very easy for Chinese sellers to sell in the UK and fulfil from the UK and not pay any VAT. They are doing this as they've seen the increased revenue that ebay has had as a result of this fraud.

    To be honest, the UK HMRC / Government should change the law so that if these large corporates deliberately facilitate fraud they should be liable and should be fined - this will ensure that they actually pay more attention.
    Posted: Jul 19, 2013 By: jashry Member since: Dec 23, 2009
  20. devereux

    devereux UKBF Newcomer Free Member

    5 5
    Which is the best paper to contact? The Daily Mail? We need a good investigative journalist who can take this up.
    Posted: Jul 19, 2013 By: devereux Member since: Jul 18, 2013
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