back to article Osbo slaps down Amazon and eBay – who'll be liable for traders evading VAT

UK Chancellor George Osborne has said today the government will make online marketplaces such as Amazon and eBay liable for traders evading VAT in the UK - in his 2016 budget which outlined a swathe of tax cuts. The growing number of sellers based outside Europe and sell goods online without having a registered VAT number …

  1. Anonymous Coward
    Anonymous Coward

    Time to look for some eBay bargain tat, then

    Before this kicks in. If it ever kicks in, that is.

    1. Voland's right hand Silver badge

      Re: Time to look for some eBay bargain tat, then

      It will not really kick in.

      Honkong post is cheap as chips and everything can be declared as a present.

      So unless he forces them to police VAT thresholds on sellers too and drops that to be make it not worth it to re-register yourself vatless every month...

      1. Anonymous Coward
        Anonymous Coward

        Re: Time to look for some eBay bargain tat, then

        Some sellers in the UK often have an obvious Far East contact with a UK warehouse. Yet the UK price can be double that compared to ordering from the Far East. In theory you are getting a UK faster service - but some Hong Kong suppliers send items that arrive in 6 days - and they are signed for deliveries too.

        IIRC a country sets its overseas postage rates depending on how much traffic it gets from the other country. So - there's probably a large imbalance of RM having to deliver a lot of mail. It is hard for them to recoup their costs on the small amount going the other way.

  2. Anonymous Coward
    Anonymous Coward

    a big rise in overseas suppliers storing goods in Britain

    and how did they get here from China, may I ask? Hitching a ride under amazon drones? Smuggled in pockets of milions of tourists returning from China? Baloons, anyone?

    Sure, they could have been shipped first to some EU country with little or no import controls and then re-sent to Britain. But hey, they could have been sent directly to the UK. And who's in charge of those UK customs. Given the volume of chinese "direct imports", I'm baffled why they don't ship weed and other illegal substances the same way...

    1. allthecoolshortnamesweretaken

      Re: a big rise in overseas suppliers storing goods in Britain

      "how did they get here from China...?"

      Via the internet, duh! It's eBay and Amazon, innit? But seriously, good point.

      "I'm baffled why they don't ship weed and other illegal substances the same way..."

      I'm pretty sure they do.

    2. Anonymous Coward
      Anonymous Coward

      Re: a big rise in overseas suppliers storing goods in Britain

      I'm baffled why they don't ship weed and other illegal substances the same way...

      Who told you that they do not?

      It is the same route in both cases - container from Amsterdam to UK. The difference is is the container filled there or in Shenzen. That route is practically not policed with customs spending most of their resource on shaking their racket out of the Dover arrivals. End of the day, getting her majesty's fair share from someone's "personal consumption" booze is much more important that preserving the jobs in uk companies (and collecting VAT which is orders of magnitude more).

  3. Shagbag

    More weasel words from, perhaps, the most disliked Chancellor Britain's had.

    "That unfairly undercuts British businesses both on the internet and on the high street, and today I can announce that we are taking action to stop it. That’s the first thing we do to help our small firms."

    What a load of tosh. If he really wanted to help small firms he would remove the VAT burden for British businesses. To try to suggest he's somehow "helping" firms by continuing to impose taxes on them and the burden of compliance is, quite simply, disingenuous.

    Small firms on the high street? Which country is he talking about? In Britain it's nearly all Charity Shops because they only pay 20% of the astronomical Business Rates. Where's the reduction in Business Rates to help the high street, Mr Chancellor?

    He may be Tory, but he's definitely not pro-business.

    1. phuzz Silver badge

      Re: More weasel words from, perhaps, the most disliked Chancellor Britain's had.

      "Headline tax cuts included a further slashing of corporation tax to 17 per cent"

      He's pro <u>big</u> business, especially the ones he owns a stake in.

  4. Anonymous Coward
    Anonymous Coward

    "Sites like Ebay and Amazon have provided an incredible platform for many new small British startups to reach large numbers of customers. But, we're so fucked off because we're not getting a big enough cut."

    FTFY

  5. thesykes

    "What can I do," thought George, "to reduce the amount of corporation tax not being paid by those nice American chaps? I know... I'll reduce the rate of taxation! Oh George, you are a clever boy."

    1. rhydian

      May I suggest you take a look at the Laffer curve?

      1. Anonymous Coward
        Anonymous Coward

        May I suggest you take a look at the Laffer curve?

        To quote the Wikipedia article "The shape of the curve is uncertain and disputed"

        To quote someone I know who really is an academic - as distinct from a financial sector worker - economist, "There is a lot of bunk in economics, it isn't really a science. It's about as scientific as theology."

        1. MonkeyCee

          Re: May I suggest you take a look at the Laffer curve?

          Actual economics is far more about politics than anything else.

          Take ten concepts that most economists agree on, and you'll find half are implemented at gunpoint (sometimes literally so) and the other half will never get done outside of some wacky dutch experiment.*

          This has nothing to do with which of these ideas is efficient, effective or fair, but entirely to do with if it will appear to benefit those in charge of the levers of power.

          It's very much a Pareto efficiency problem, with start conditions of 1% of the population holding 50% of the goods, 24% holding 40% of the goods (unevenly distributed) and 75% holding 10% of the goods (again unevenly distributed). Almost any change in this system is going to piss off the 1%, and probably annoy the 24%. The political class is almost entirely drawn from that top 25%, and thus is unlikely to change the system.

          * the fact that the Dutch do these pragmatic but potentially unpopular things is why I live there. And the cheese.

      2. thesykes

        @rhydian.. you don't get it, do you? Previously Amazon, Apple, Google etc didn't pay 18% on millions, now they won't pay 17% on millions. Therefore, the amount they aren't paying is reduced.

      3. MonkeyCee

        Laffer

        I have. One of my professors wrote his thesis on the difference between the observed Laffer curve for the USA and EU countries for personal income tax rates.

        The balance point varies a bit, depending how you factor in various other taxes (especially dividend and capital gains, since you can jank around high levels of income to go these areas instead), but it's ALWAYS above 50% tax rate, and for the US it's ~70%, and the UK ~80%. We are ALMOST always on the left of the curve in any developed country.

        This is of course ignored, since any fule noes reducing tax collection will result in more total tax take....

        The recent tax cuts resulting in higher takes are usually caused by earnings being held over. Which makes sense, if you'll be paying 5% less tax next year, get half your income this year, 150% next year.

        I very much doubt Laffer ever thought about applying it to corporate profit tax, since profit (rather than personal income) are far easier to adjust.

  6. Dil55

    About Time

    As a small on-line VAT trader on Amazon and other market places, we WELCOME the news in the budget, we will hopefully now have a level playing field on these market places.

    Well done Mr Osborne overall a good budget for small businesses.

    1. JohnMurray

      Re: About Time

      Not so good for local councils though, who now have to find a replacement income source instead of business property tax. Never forgetting the 2% referendum lock on council tax rises. Still, they can always jack the price of business refuse collection, except most of it is via private collectors..and didn't I read that George was going to raise the referendum lock reference to 4% eventually. After all, the local council grant from central gov is going to be zero by 2020.

      Oh, and this country cannot remove VAT...once levied it must remain. EU!

      1. Dil55

        Re: About Time

        Agree not so good for councils, however going from my experience and knowledge it appears local councils are extremely inefficient, council employees are paid significantly higher then in the private sector. Councils processes and procedures are ambismal

        Hopefully the budget will increase smaller enterprises.

        Personally it has given a little more confidence to grow the business and to eventually move into larger premises and take on more staff.

  7. Mark 85 Silver badge

    Musings...

    I wonder what would happen if Amazon or E-Bay decided no more sales to the UK as they don't want this burden? I know that they won't because profit and all that.

    I suppose FB, Google and others could also do the same thing with various countries...

    Reality... all companies should follow the tax codes as well as all applicable laws in the countries where they do business... sales, services, etc. But, they hire the best lawyers to weasel out of many things, including taxes.

  8. Mark M.

    Sales tax

    All companies like Amazon will do is collect/record the tax owed to HMRC though UK sales, then back-charge the seller for the privilege. If that causes double taxation to the overseas seller, then probably tough titties.

    Though once TTIP gets in, such companies can sue HM Government into removing the tax as it dents their profits.

  9. David Pollard

    Nothing to do with me, guv

    An eBay spokesman [said], "... we would not hesitate to suspend sellers found by HMRC to be evading VAT."

    That looks rather like defensive first response to a seriously rattled cage. I too would be a bit concerned if C&E were about to be able to assert joint and several liability in these circumstances.

    1. Dil55

      Re: Nothing to do with me, guv

      Ebay and Amazon feed off sales and make significant money from there own market places. Both amazon and eBay could not care less about vat. There are 1000's of these so called overseas sellers who flaunt the Vat rules.

      You may also notice that on Amazon and eBay some sellers do not disclose there address to buyers!

      If you purchase from Amazon or eBay I would suggest It is better to purchase from a company who shows their full trading name, address and if applicable there vat registration number. I.e support home grown businesses

  10. Joe Werner Silver badge
    Pint

    In other places...

    ... stuff is taxed on import. You as the buyer can be held liable for tax evasion (or whatever) if you make the seller declare it as a present.

    This is (to me) perfectly ok. The discussion whether a sales tax is sensible or not is not my point (but people will get upset about that anyway). What I am unhappy about is what the national mail service charges for the customs clearance! Bunch of lovemaking lovechilds....

    Icon because that part of the tax system is what I like least...

    1. Down not across Silver badge

      Re: In other places...

      What I am unhappy about is what the national mail service charges for the customs clearance!

      This. It's utter insanity. I have no issue paying duty on stuff I import, but I resent the extortionate charges by RM for collecting it, which in many cases can be much more than the duty itself.

      1. Anonymous Coward
        Anonymous Coward

        Re: In other places...

        "[...] the extortionate charges by RM for collecting it,"

        A few years ago I bought a music CD from Amazon Japan. They said they now only used courier services to the UK - so that upped the price a bit. When it arrived by courier there was an invoice that said it had cleared Customs ok. Apparently the price plus postage was just under a threshold.

        If it had been a tad more expensive then the courier would have charged £45 on top of the duty. Makes RM charges seem quite cheap.

        1. Intractable Potsherd Silver badge

          Re: In other places...

          In general, it would be good to see a breakdown of how various bodies calculate their "administration charges", because they never seem to bear any resemblance to what the real cost would be. Anyone would think that they are just pulled out of thin air ...

          1. Anonymous Coward
            Anonymous Coward

            Re: In other places...

            "Anyone would think that they are just pulled out of thin air ..."

            Works for Osborne's economic theories.

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