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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    There's a very easy fix to this, the HMRC can ask ebay to suspend all accounts that have revenue in excess of £79K (the VAT threshold) and fulfil in the UK until they provide a valid VAT number - this would resolve the problem.

    As for customs officials knowing the value of goods, I agree with you that it might not be as excessive as in my example, but they would almost certainly undervalue good by 50% and given that most goods they sell are under £10, it is very difficult for customs officials to ascertain quantities etc.... so the chances of them getting caught for undervaluing is probably the same as ebay stopping these fraudsters i.e. nil

    As for some money being left in the UK, it's the VAT that needs to be paid, this is a significant amount of money, the fulfilment centres are not that profitable as there's a lot of competition amongst them, they were profitable when these initially took off, but as with anything as you get more suppliers entering the market, the margins dwindle away.
     
    Posted: Oct 9, 2013 By: jashry Member since: Dec 23, 2009
  2. dooyoo

    dooyoo UKBF Contributor Free Member

    68 3
    Well just by supplying VAT number will not fix anything, you have to pay that tax in, number itself will not pay any tax:)

    At the end of a day it is all of us that buy those goods.
     
    Posted: Oct 9, 2013 By: dooyoo Member since: Jul 6, 2013
  3. jashry

    jashry UKBF Newcomer Free Member

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    99.9% of the customers do not know they are purchasing from a Chinese seller as they mask this very well on their listings, they state that they are a UK seller (they do not mention that it's from a fulfilment centre).

    I don't think you realise how serious this issue is, it's not only about VAT fraud, many of the items they sell do not meet EU regulations and are dangerous, although we can leave that for another thread.
     
    Posted: Oct 10, 2013 By: jashry Member since: Dec 23, 2009
  4. dooyoo

    dooyoo UKBF Contributor Free Member

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    You can click on seller name on ebay and see where the seller is registered, at the very moment that is the easies way how to sort them out.
    I guess someone could run a campaign how to recognize Chinese sellers. But then again they all will register UK ebay accounts and that is just never-ending chase.
    Someone who has the authority, just have to start taking them down one by one (confiscate goods that are being sold without proper CE certificate is where to start and easiest part) and also break eBay's ball's.
    For instance, HMRC can tell ebay if they will not cooperate in this matter, then every financial year report from them will be under microscope. And if that company is run by humans.......there will be some wrong doings to be found. MY GUESS (and just my guess) would be that ebay is getting away with couple of wrong doings all the time.

    Who will be doing this work??? There has to some sort of group of people that would start pushing for it. At the end of a day government works for us all (well I would like to think that). Unfortunately, it takes someone's time and money. Someone said work for commission, but chances to get any money that has been owed by some individual/company in China is very slim.
    The easiest way would be to seize all the goods that are not up to requirements for resale in EU (and destroy them), make sure that at least correct value tax is being paid upon import. And make sure that there are no laws broken in work of fulfilment centres.

    No one actually has to go after Chinese sellers with unpaid tax bill, to kill their "illegal" business!!! There are so many other ways to do it.
     
    Posted: Oct 10, 2013 By: dooyoo Member since: Jul 6, 2013
  5. jashry

    jashry UKBF Newcomer Free Member

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    May be forums is not the right way to get notices, perhaps we should have a facebook page or a Twitter account dedicated to the HMRC as it would be embarrassing for them to have daily tweets of frauds that they are just ignoring.
     
    Posted: Oct 11, 2013 By: jashry Member since: Dec 23, 2009
  6. Page

    Page UKBF Big Shot Free Member

    3,561 266
    If my memory is right the laws on online selling and VAT have changed

    Now if you only sell a single item ONLINE you are meant to register for VAT :eek:

    Now enforcing it is a different issue

    In the long run I suspect the law will be changed so that Amazon and eBay will be responsible for collecting the VAT but we are some years away from that yet

    Interesting thread
     
    Posted: Oct 13, 2013 By: Page Member since: Jul 28, 2007
  7. Page

    Page UKBF Big Shot Free Member

    3,561 266
    They are generally not the brightest bunch and the nature of civil service jobs is that you get punished for doing wrong but so what if you make an effort and put your neck out and achieve - so over time you get left with the plodders

    So everyone plays safe and does "what they have to do" and does their time

    This applies across the board and across the civil service and council jobs - not 100% but very high
     
    Last edited: Oct 13, 2013
    Posted: Oct 13, 2013 By: Page Member since: Jul 28, 2007
  8. jashry

    jashry UKBF Newcomer Free Member

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    You're absolutely right, this will happen one day, but it will probably take around 10 years before the HMRC realises that they have lost out on a few billion of revenue from amazon and ebay, in the meantime good luck to those chinese sellers that are defrauding our thick government (afterall the HMRC isn't really independent from the government and Mr Cameron should pull his finger out and take some control of the situation)
     
    Posted: Oct 13, 2013 By: jashry Member since: Dec 23, 2009
  9. Jayser100

    Jayser100 UKBF Enthusiast Full Member

    718 122
    Someone mentioned earlier (in this enormous thread!) that Amazon are "going the same way" and sadly that does appear to be true. In fact, I wrote an email to a senior contact there yesterday, to complain about a Chinese company who are selling sunglasses using keywords in their title that are copyright owned by a major brand, plus no indication whether their products conform to EN1836 sunglasses standards, which from the photographs they probably don't.

    A major concern here is that Amazon now have automated software in place that migrates popular products from one of their websites onto the others - so, for example, if some Chinese sunglasses sell well on Amazon.com , and Amazon keep stock of those products, they migrate it automatically to the European sites. The obvious problem is that those products aren't necessarily going to conform to European standards - by the same token, sunglasses that conform to EN1836 won't be legal for sale in the US unless they comply with their standards, which are Z80.3. Also, anyone based outside of the US who sells sunglasses in the United States needs to pay $1,800 for an FDA (Food & Drugs Administration Govt. Department) license, otherwise they are selling illegally - they also have to have a registered US agent, and the factory making the product must be FDA registered.

    I don't think Amazon have thought these issues through, they have become so profit-orientated that many of their scruples seem to be going rapidly out of the window. When I first became a seller in 2008, I had to go through a pretty strict vetting process. I remember being impressed that they bothered with that, given the fact it kept the dodgy goods off the site. Halcyon days, long gone it would seem!
     
    Last edited: Oct 16, 2013
    Posted: Oct 16, 2013 By: Jayser100 Member since: May 21, 2009
  10. jashry

    jashry UKBF Newcomer Free Member

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    There are two issues here:

    (1) Fraud - the sellers are fraudulently collected VAT from customers and this is going directly into their Hong Kong / Chinese paypal account and eventually their Chinese Bank account i.e. it never ever hits the UK banks and the VAT never goes to the HMRC.

    (2) Compliance - you are absolutely correct, most Chinese sellers get away with selling absolute and utter rubbish that doesn't comply with UK standard. The plugs they use are not only sub standard they are actually dangerous and are often not even fused.

    I think (1) is something that can be solved easily, but HMRC will take their time as the government has just had a windfall from Royal Mail so they're happy for the moment

    I think (2) is difficult to resolve unless you ban these sellers completely which is unfair if they pay VAT and they make an effort to ensure compliance, however I don't think there are many Chinese sellers with a conscience who care about the fact that they are putting UK consumers lives in danger.
     
    Posted: Oct 17, 2013 By: jashry Member since: Dec 23, 2009
  11. devereux

    devereux UKBF Newcomer Free Member

    5 5
    I contacted the Daily Mail and HMRC too and have heard nothing. My next stop is my local MP.

    I think a dedicated twitter account is a very good idea and maybe we could name and shame some sellers albeit very carefully.

    It is true about sellers importing goods from China and not declaring the correct value. I Import from China 5 or 6 times a month and all my suppliers are surprised that I want the correct value declaring!!

    Lets not forget the UK sellers on ebay who are not registered for VAT.
    One of my competitors turns over 500k a year and is not VAT registered.
     
    Posted: Oct 18, 2013 By: devereux Member since: Jul 18, 2013
  12. jashry

    jashry UKBF Newcomer Free Member

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    There are a large number of Chinese sellers turning over £250,000 per week and they're not paying VAT. I assume some of these sellers may now have people in the UK looking after their fulfilment operations, as i don't think they would trust anyone with that much stock in hand unless they have daily deliveries of products.
     
    Posted: Oct 21, 2013 By: jashry Member since: Dec 23, 2009
  13. japancool

    japancool UKBF Big Shot Full Member

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    May I ask how you know what their turnover is?
     
    Posted: Oct 21, 2013 By: japancool Member since: Jul 11, 2013
  14. devereux

    devereux UKBF Newcomer Free Member

    5 5
    You can find this information using Terapeak
     
    Posted: Oct 21, 2013 By: devereux Member since: Jul 18, 2013
  15. japancool

    japancool UKBF Big Shot Full Member

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    I've never used it, does it give you a breakdown of how much they sell to a particular country, or just their overall sales?
     
    Posted: Oct 21, 2013 By: japancool Member since: Jul 11, 2013
  16. devereux

    devereux UKBF Newcomer Free Member

    5 5
    Ive not used it for a while but I think its just overall sales.
     
    Posted: Oct 21, 2013 By: devereux Member since: Jul 18, 2013
  17. UKVATFRAUD

    UKVATFRAUD UKBF Newcomer Free Member

    10 0
    Finally some more people know about the Great British VAT scam that has been going on for several years as our HMRC look the other way. The lost VAT revenue is now in the Billions and flooding the market with illegal dangerous goods that even the Chinese government would not allow to be sold within China mainland. If these Asian sellers do the same scam in China it is likely they would either go to prison for a long time or be executed for Tax evasion.


    Try being a UK business and not paying your VAT return on time, HMRC certainly take note then. But being a company registered in China and dispatching from the UK mainland through ecommerce site like ebay and Amazon and HMRC do not notice at all.
     
    Posted: Jan 7, 2014 By: UKVATFRAUD Member since: Jan 7, 2014
  18. jashry

    jashry UKBF Newcomer Free Member

    29 0
    Just to clarify, the HMRC could shut these illegal Chinese sellers who are defrauding the British Public by not paying VAT on goods sold FROM the UK (Yes Fulfilment from the UK means that legally and within our Tax rules, the goods are subject to VAT), however I believe that Ebay may be paying (this is an opinion and NOT a fact, so this is all alleged) the tax man a backhander to allow this illegal activity to continue. Both Ebay and Amazon facilitate VAT fraud for these sellers, yet they are both immune from the HMRC unlike the UK sellers that are the easy targets that the HMRC goes after. Hopefully, at some point HMRC will realise that they have stopped collecting VAT from ebay sales
     
    Posted: Jan 9, 2014 By: jashry Member since: Dec 23, 2009
  19. UKVATFRAUD

    UKVATFRAUD UKBF Newcomer Free Member

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    No wonder the UK government are making cuts while China is exploring the moon. HMRC need to pull their finger out and stop this as it is destroying legal UK businesses A good example local to us is these VAT dodging Asian sellers do not just have one small warehouse but whole industrial estates and they sell everything and they are all staffed by guess who Asian workers who are either illegal or Students.

    Maybe if more legal UK businesses registered as Chinese based entities and done the same thing HMRC may do something about it, as it would be nice to have a 20% advantage over your competition plus no corporation tax or NI to pay not forgetting minimum wage.
     
    Posted: Jan 9, 2014 By: UKVATFRAUD Member since: Jan 7, 2014
  20. jashry

    jashry UKBF Newcomer Free Member

    29 0
    Unfortunately, I have complained to the HMRC numerous times and I've even given them a list of 20 sellers (I have a list of over 200 sellers which I've stopped maintaining) that defraud them of £20m in VAT per year (2012/2013), however I heard nothing back at all and it seems like they just don't care. It is unbelievable that such a severe level of fraud is going on and that the government (who ultimately controls the HMRC) wants to do absolutely nothing about it. As you said, why not defraud the HMRC yourself and get your payments made to a Chinese registered Paypal account. I've told everyone how the fraud is done in an earlier post, so why not take advantage of the HMRC's exemption for the Chinese and save 20% ?
     
    Posted: Jan 9, 2014 By: jashry Member since: Dec 23, 2009
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