Import VAT, where to find

[NotSo]

Hi Guys,

I made a tranaction for an item on alibaba for 55usd. The item requires the payment of GB VAT on import but I don't know where this is listed. I checked the supplier's invoice and there is no mention of VAT. Are the delivery company going to give me another invoice ? The transaction on Alibaba does mention 11 USD tax but it doesn't say much more.

 

[paulears]

What should happen is that if you are NOT registered, you've not been able to give Alibaba your number - so they will charge 20% VAT on whatever the item was described at, so assuming the item was 55USD, then the 11 dollars will be added to the price. You should have been charged 66 dollars. Have you paid? Payment options on lower amounts could allow payment by credit or debit card, or even PayPal, but most Alibaba sellers will be paid via your bank, or Alibaba invoice you. Pay it and the goods will be sent. When they arrive, if the VAT has been paid, the goods should arrive with you by Royal Mail, or UPS/Fedex etc with no extra charge.

If they only charged you the 55USD, then the VAT will be collected by the delivery service this end - BUT they will charge you 11-15 POUNDS for doing this, plus the 11USD VAT.

The usual procedure for goods of this value is you get an alibaba request for payment - you can then just pay it. A few alibi sellers will ask you to bank transfer the money direct to their account, or perhaps give you a PayPal account in an individual's private name. If you do this, Alibaba will not know you have paid, and you have no protection because their escrow system cannot work - but it is cheaper for the supplier. A few of my bigger ones do now deal direct, and I'm happy taking the risk, and get a bit better deal.

 

[MOIC]

I don't think paying your Alibaba supplier the VAT element is the correct thing to do, as they have no standing in the UK to issue VAT invoices.

I presume the item is being shipped by an international air courier, in which case they will ask for the VAT (if applicable) prior to the parcel being delivered.

 

[DefinitelyMaybeUK]

they have no standing in the UK to issue VAT invoices

That may be the case, but since last year all overseas sellers for orders less than 135 GBP should be UK VAT registered and therefore collect the required VAT amount. It may well be the case in this instance that VAT/Tax has been collected correctly, but equally could be bogus.

The Alibaba help page isn't 100% on this, given the UK departure from the EU, but the intent is there!

Help Center

service.alibaba.com

 

[MOIC]

I doubt very much that any seller on Alibaba that’s based in China is registered for UK VAT.

There’s probably a distinction in the regulations between B2B & B2C.

The OP will know if the seller has supplied their (genuine) UK VAT number on their invoice.

 

[paulears]

I looked up the number on an invoice and got this.

VAT Record: GB976354675​

Company name on VAT Registration:	ALIBABA.COM (EUROPE) LTD
VAT number:	GB 976354675
VAT ID:	976-354-675
Jurisdiction of VAT number:	United Kindom (UK)
Issuing Authority of VAT number:	HMRC (HM Revenue & Customs)
VAT status:	Valid VAT Number
Address on VAT Registration:	8TH FLOOR MILLBANK TOWER, 21-24 MILLBANK, LONDON, , SW1P 4QP
Period when VAT number issued:	Issued before November 2009
Last checked by us:	2021-12-30

ALIBABA.COM (EUROPE)'s VAT Number is GB976354675
ALIBABA.COM (EUROPE) LTD's VAT Number is GB976354675

 

[Danilikk]

Hello,

I am about to start my business, at the moment I have only ordered samples from Alibaba and if they are satisfactory I will go ahead with my initial order of stock but as I am at a very early stage of starting a business I do not really want to register as a business yet. But because of VAT would it be better for me to submit the first order as non-business individual or would it actually be more beneficial if I registered my business?

Thank you!

 

[paulears]

You could register for VAT from day one, assuming your plan is for turnover of 90 grand, but that has much wider implications than just your alibaba orders. Probably worth a free chat with an accountant first, who will determine if your business model will benefit or be hindered. Once you have the alibaba account set up, they'll just invoice you ex-vat, otherwise, they will add it. They of course, find it irrelevant as it goes on after them, so it isnt your supplier, but alibaba who manage the collection, or not, of our taxes.