Dissolved and Dormant companies still trading on Amazon

With the spotlight that’s been put on marketplaces in general and Amazon in specific regarding sellers (in particular Chinese sellers) who are alleged to be avoiding paying VAT and other taxes due in the UK and EU, it’s not surprising that people are casting a close eye on their competitors. Today we’re breaking the news that there appears to be further suspicious behaviour by sellers.

We have reports and personally cross checked a dozen Amazon accounts which are trading in the names of companies which are either dissolved or dormant according to Companies House.

A company previously registered with Companies House which has either been dissolved or is dormant shouldn’t be trading. It means that all of the consumer rights a customer may have are worthless and of course that any trading taking place under that company name won’t be taxed corporation tax or paying any VAT.

With Amazon, as with most marketplaces, it’s very easy to check as the company address and registration number are openly displayed on the site. It’s the work of seconds to copy a company registration number and pop it into a Companies House search to check the trading status of the company.

We don’t know for certain that tax isn’t being paid. It is of course possible that a company previously traded on Amazon and has been wound up but the seller is simply using the same account and paying tax as a sole trader or under a different company name. In this case of course the account should have had the company details updated or a new Amazon trading account should have been opened.

All we can currently report is that dormant and dissolved companies are trading on Amazon, we’re told Amazon have been notified of some of the suspicious activity that’s taking place on their site. We don’t know if UK companies are trading or if it’s sellers from overseas who are using dissolved UK companies as a trading front.

Something isn’t right though and at the very least consumers are being denied their protections under law and if they get a substandard product and try to take action against the company they believe they’ve purchased from they’ll have no recourse. Equally if a business makes a purchase they may well try to reclaim the VAT they think they’ve paid either from the wrong VAT number or be reclaiming VAT which was never paid in the first place.

Whilst we won’t be naming specific details on Tamebay of businesses who appear to be trading questionable company details, we have made a test purchase from Amazon account from a company listed as dormant by Companies House just to see what invoice details may be supplied. We’ll report back as soon as we receive the goods.

Edited to add:

We’ve had one Tamebay reader contact us to say that they have registered a company name in case at some point they wish to go limited and are simply reserving the company name for such an eventuality. We totally understand this, but the businesses referred to above went further than this in listing the company registration number as the merchant of record on Amazon.