Crackdown on eBay sellers 'failing to display' VAT numbers Blighty's Trading Standards has reported more than 200 non-EU sellers to eBay for failing to display VAT numbers – a figure thought to "barely scratch the surface" of traders breaching the rules, El Reg can reveal. Under e-commerce regulations, a VAT number must be easily, directly and permanently accessible. As an …
It's a nightmare to make any changes to your VAT number. I deregestered and in the end spent so much time communicating with ebay that I wanted to remove the number that in the end I gave up (you may think you can change it in your settings but you can't). I have now reregistered for FRS and have a new number.
Anubhuti 11:03:25
Welcome to eBay UK Live Chat, my name is Anubhuti. How can I be of assistance today?
me 11:04:08
Hi, just going throught my business account and it is showing a VAT number. I have noiw deregistered. can this be removed. thanks.
Anubhuti 11:05:54
Hello Terry,
Anubhuti 11:06:02
Thanks for sharing your concern.
Anubhuti 11:06:20
Just to confirm, you want removal of VAT number from your account?
me 11:06:49
I confirm the removal of the VAT number from my account
Anubhuti 11:07:23
Thanks for confirm, let me check this for you.
Anubhuti 11:10:02
Please stay connected. I am checking this for you.
Anubhuti 11:13:01
Thank you for waiting.
Anubhuti 11:13:31
Terry, shall I help you with the steps to remove VAT number from your account?
me 11:14:02
ok, but everythign I read said I had to get in touch with ebay
Anubhuti 11:15:02
May I know where you have read this?
me 11:15:20
http://sellercentre.ebay.co.uk/change-or-remove-your-vat-number
Anubhuti 11:16:09
Thanks for the link.
and so it goes on and on and on
Fortunatly the overall costs of selling as a business cost too much for the handful of bits I want to get rid of so I flog it as a private seller. Much less hassle and cheaper.
Of course the way around this would be to act as a private seller rather than a business seller. Then all you would need to do is sell privately until you're just under the threshold and then close your account. Then free to pop up as a different user.
The ebay model is there for fraudulent transactions. heck I wouldn't be surprised if it was used for spying - in much the same way that the classified ads used to be (apparently)
This does not quite work as one of the key metrics for a seller is its rating. An out-of-Eu seller will usually find it difficult to get up to a rating where it is trusted within the turnover limits on high ticket items - it is only 81k.
In fact, for out-of-Eu this should be dropped to 10k or less and VAT + EXCISE collected by Amazon or Ebay. Under contract with HMRC if need be. That will solve the problem overnight (make it profitable for them to collect it)
40%+ of all sellers of electronic tat are in China, pay no VAT and try to pass their packages as "gift" in their customs declaration.
While this should be enforced at import by customs, the sheer volume will overwhelm them so we will have to find another way and making Amazon and Ebay _WITHHOLD_ VAT AND CUSTOMS FEES/EXCISE to any non-Eu seller which exceeds the VAT registration threshold is the only way. They have the full information needed for that - namely the annual turnover of a particular seller, its out-of-Eu jurisdiction and they are the conduit for the money.
Now why Customs and Excise is not requesting this from Amazon and Ebay - well, there is a reason why Amazon and Ebay pay that much to various lobby groups :)
It's not too hard to find Chinese sellers playing fast and loose with the eBay system, things like misdescribing goods (and not something that could be attributed to ambiguous translation). Does eBay care? Apparently not. They don't seem to have liability for this tax dodging either.
So Irish Customs now automatically seize any Asian parcel (post or courier ) marked GIFT and demand a copy of the invoice before they release it.
Pity Revenue are not so forceful on Big Multinationals that mysteriously make no profit.
If the buyer is spending more than €20 INCLUDING SHIPPING,. they pay customs duty and THEN full Irish VAT on sale price, shipping cost and duty! A €6 handling fee is added!
From https://www.gov.uk/vat-registration-thresholds
VAT thresholds
Circumstance Threshold
VAT registration More than £81,000
Registration for distance selling into the UK More than £70,000
Given that an iphone cover costs very little, you'd need to be selling tens of thousands of them to break the threshold. If you're selling in from China, who is going to check your accounts anyway?
"Blighty's Trading Standards has reported more than 200 non-EU sellers to eBay for failing to display VAT numbers,"
So what. It's not eBay's responsibility to enforce the rules. If these are non EU companies then they have no obligation to observe our VAT rules either. So I can't see that this will make the slightest bit of difference...
It scares me to say it, but the only way to have any impact on this is to require eBay etc to enforce the rules, otherwise you are just playing whack a mole.
It reminds me of copyright and torrent search engines, that's why it scares me to suggest we need to change the laws... who knows what we will be unleashing on ourselves, and can we even stop them?
Perhaps if we can't beat them then we should join them? There is only certain products which are worthwhile selling from China. Usually light weight high value items (i.e. electronics). It might be a radical change, but perhaps we should just scrap the VAT on items like that and make up for it elsewhere.
Alternatively, increase the postage for items from abroad. They seem to be able to post parcels to us in the UK cheaper than I could send a letter, never mind a parcel to another person in the UK. Although this goes against the free market principle.
There's three crappy solutions for you, hence we will do nothing about it apart from an occasional HMRC crackdown headline!
"All companies selling/importing to the UK have to abide by UK laws (including tax)."
No they don't have to - and clearly they don't in reality. How are you going to make say a Chinese company give a crap what our rules are? It's not like we can do more than ask nicely.
Just like when I ship outside the EU, I don't care what their local laws might be...
Its become impossible to compete with chinese businesses selling from UK warehoues. Registered in Hong Kong they do not pay VAT but they should as the products are posted from the UK.
Its about time ebay UK did something to support UK sellers in the marketplace.
As for VAT number, I'm still displaying the VAT no. of my old partnership as another poster mentioned, it is impossible to change it. I've contacted ebay 10 times but to no resolution.
Non-EU sellers don't have anything to do with VAT. eBay is US-owned; non-EU sellers aren't obliged to have anything to do with VAT and are talking, essentially, to Americans who aren't either. VAT is a Europe thing, so calling people outside Europe tax-evaders is a little disingenuous. No, too polite...it's bollocks, not disingenuous.
In the short term, VAT chucks a cubic fucktonne of money at the various governments involved...in the even slightly long term, it's grit in the wheels.
Sorry small business owners but the old saying goes - if you can't beat them, join them.
Make an eBay and an Amazon shop and do most of your business through there. You'll find that if you are actually UK based and offer good customer service people will buy from you even if you charge a little bit more (not taking the piss though). Mainly cause they will get their stuff that week, not some random period of time later when the cargo ship arrives.
Or were you selling Chinese bits and bobs yourselves but adding a massive markup on top by any chance and are now just sad because the game is up? I'm looking at you Maplin.
There are two distinct issues here:
(1) HMRC being able to collect VAT on extra-EU shipments to UK non-vat registered parties - typically consumers or sole trader businesses.
(2) Small VAT registered UK businesses being able to compete with UK non-vat registered businesses who bring stuff in with little or no VAT via Ali Expresss or DH Gate etc and then re-sell on ebay as private sellers or as non-vat registered businesses.
It's undertsandable and right that HMRC want to collect what's owed at (1) which is the subject of this article. What I haven't seen HMRC tackle is (2). The business model of:
(1) Buy from Ali/DH with an understated invoice and little or no VAT/Duty. I our experience it's harder to get a correct invoice than the 'minimised' one provided as 'standard'.
(2) Sell on Ebay at a price that undercuts the VAT inclusive rate of legitimate businesses and provides a nice mark up.
(3) Repeat.
(4) Stay below £81K or start a new ebay ID.
We gave up selling on ebay and several product lines as an analysis of our competition and the market showed that the above business model took 80% + market share and it was impossible to compete legitimately in these areas. This resulted in 2 redundancies. Apart from the human cost HMRC lost the income tax and NI from 2 workers and the VAT from their former spending power.
HMRC is also unlikely to collect any share of the revenue from this trading activity through personal or corporate tax or (obviously) VAT.
I appreciate that HMRC have to target their resources but the damage done by the proliferation of the above business model (which we have analysed in much detail) is substantial and the cost is far more than the uncollected VAT at the point of import. Indeed - in monetary terms the uncollected VAT at the point of import is the thin edge of the wedge. The serious missing collectable revenue is further along that same value chain.
You know the fixing goes on both ways. I have been trying to send some baby stuff out to a relative in China, if I use the UK ParcelForce website it will cost me over £130 for about 7KG; if I use a CHINESE parcel company associated with ParcelForce it costs me under £30.
That is a LOT more than VAT can account for.
Same depot, same staff, same delivery time - go figure.
When the article refers to NO EU Sellers, they are Sellers from outside the EU who have their stock located in the UK. These NON EU Sellers are officially know as NETPs - Non-established taxable persons (NETPs).
From 1 December 2012, all Non-established taxable persons (NETPs), supplying goods located in the UK are required to register for UK VAT when they make their first supply of goods or services here, regardless of the value. There is no VAT threshold.
The 200+ Sellers reported to eBay via Trading Standards were mostly NETPs. Some were seller trying to pass themselves off as UK companies.
The 200+ seller are making sales of around £250million on eBay.co.uk a year.
This equates to £41,666,666.00 a year in VAT evaded a year
HMRC quoted "HMRC added that failure to display a VAT number was not a breach of tax law"
Perhaps they should take a good look at the EU Distance Selling regulations on the Government website:
https://www.gov.uk/online-and-distance-selling-for-businesses/selling-online
"give your VAT number (if your business is registered for VAT)"
This sums up HMRC's complete incompetence and failure the realise the NON EU Companies with stock in the UK are using platforms like eBay & Amazon to defraud the UK of hundreds of millions in VAT and legitimate UK sellers Billions on lost revenue.....
The funny thing is if you're aiding and abetting software piracy in the UK, the government will go after you with a stick. However if you're aiding and abetting VAT fraud, like eBay and Amazon do, you get - what, not even a slap on the wrist?
There are a bunch of decent ways for this to be prevented, some listed in this very comments section and all requiring these sellers to take the cost. I don't have a problem with that myself. Government, break out thy stick.
This is great news.
eBay and Amazon have been DELIBERATELY ignoring this issue and have made constant lies in response when questioned about it.
Why have they ignored it?
Alibaba has conquered the domestic market in China. eBay and Amazon have almost no say there - the only say they have with Chinese businesses is cross border b2c trade where Alibaba have almost no presence (Alibaba is mostly b2b).
Therefore eBay and Amazon have been deliberately turning a blind eye to this fraud because it benefits Chinese sellers and fills their coffers with commision payments. Amazon benefits, eBay benefits.
The downside is that UK businesses are hurt.
eBay and Amazon are complicit in this fraud and should be held accountable for it.
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