Trading Standards weigh into eBay UK VAT row
Trading Standards has submitted a list of over 200 sellers to eBay UK claiming they are not correctly displaying VAT and business information.
Apparently eBay UK is being asked by Trading Standards to take action against these sellers and ensure that they display verifiable business information such as an accurate company name, physical business address (not a PO BOX) and also display a VAT number.
According to Trading Standards, as an online marketplace and intermediary, eBay doesn’t have to mandate the display of VAT numbers by sellers until notice of a problem has been given. It would seem that this list represents such notice so eBay will have to make some kind of response.
eBay has given Tamebay a statement: “We cannot comment on specific correspondence with regulators, however eBay is conducting an ongoing education programme with overseas sellers regarding their UK VAT obligations.”
I have seen the list of sellers and (whilst not vouching for its accuracy or validity) must say it makes for interesting reading. If it is accurate, it must be noted that the volume of eBay sales that the sellers listed make amounts to very many tens of millions of pounds every year.
I’ve been in touch with the eBay seller (who is a Tamebay reader and wishes to remain anonymous) who compiled the list and he is hopeful that Trading Standards will stick to their guns and push for legal action if eBay don’t make the sellers display more transparent trading information.
We’ll see what happens.
If only eBay could be penalised for their wilful ignorance of this ongoing fraud.
Alas that is less likely – but this is a start.
eBay (and Amazon) have attempted to get away with this for so long now because it benefits them.
‘According to independent research seen by El Reg, over the past decade foreign sellers have come to dominate UK online marketplaces, particularly in the consumer electrical goods market. For example, on one site in a particular sector, the biggest UK businesses made up 56 per cent of sales last year. Now they make up less than 18 per cent of sales.’
HMRC should be protecting UK revenue and taxation streams. Due to the lax nature of eBay’s foreign seller identification these Chinese sellers are causing revenue to flow out of the UK economy without any taxation.
If the statutes are not fully in place then there should be new directives, which marketplaces must adhere to so that it is totally transparent where the goods are coming from when you buy them. For most Tamebay readers it’s fairly simple to spot a Chinese seller pretending to be in the UK (no business info, check on the feedback to see they are based in China), however, to most of the general public who use eBay casually they cannot see this.
I have been asking eBay for over a year to add an extra line to the DSR scores whereby they ask a question did the order arrive from the same country it was advertised as being sent from? If not, then the customer is provided with an option to upload images of the packaging which could show china post etc. After maybe 3 such reports like this eBay could have a team to make test purchases and if found to be mis-representing item location the seller account is suspended until the correct country location is added.
This could solve the Chinese seller pretending to be in the UK problem. For the UK fulfilment houses sending out goods for Chinese sellers who are not registered for VAT, the government should make it mandatory for all fulfilment houses to be registered and to only accept goods where a valid UK VAT number is provided. Failure to do that would result in their licence to be revoked (a similar system to what scrap metal merchants who can now not pay in cash).
These overseas sellers shipping from UK based fulfilment centers that we are talking about have no intention of paying VAT if they can get away with it. They are breaking the law now, ebay & amazon know it, the sellers know it, and HMRC do nothing to stop it. Great to hear Trading Standards are at least starting the fight back!
Making them display verifiable business details is a step in the right direction but I don’t think it will make a big difference, they still won’t pay VAT, or be honest about the goods location.
It probably requires a package of measures, verifiable business details, collection of VAT by ebay/paypal/amazon at source, quarterly monitoring by HMRC, a deposit scheme, who knows, many ways to do it.
The payback for the UK govt/hmrc is huge so it would be self funding if not profitable, and would ultimately benefit British businesses, taxpayers and the economy.
I have emailed my MP in relation to this. He responded within 1 hour with the following:
Thanks for this.
Actually I’ve noticed this myself when I tried to order something for Christmas on Amazon and when I carefully read the sellers details I saw they were based in China.
I’ll happily take this up and write to Ministers/HMRC to see what their view on this is and come back to you with their replies.
I will chase him up accordingly to see if anything has been done.
We got our MP to write to Ceo of HMRC – Lin Homer. We sent a very detailed report about the situation. We got a letter back from her saying we should report it to HMRC VAT fraud team. Which we had done already.
Perhaps a good angle would to tell your MP that HRMC are failing to stop act even when it has been reported to them many times.
They have completely failed to assess the risk of the situation and are completely ignorant of the scale of the fraud which is now running into the £billions….
thanks for the reply. Our kids go tot he same school so if i see him at a function I will definitely chase him up in person about this. Has anyone tweeted HMRC also?
after the expenses debacle we wonder if MPs are best to investigate fraud LOL
Has anyone thought of setting up a Facebook Group:
eBay UK Sellers against VAT fraudsters (similar to the one set up for kids holiday prices)?
it will be a job finding any ebay uk sellers to join, who are not also doing their best to avoid vat LOL
Tax avoidance is paying as little as possible within the UK tax laws. Everyone does that to differing degrees.
This is tax evasion, which is outside the law. There is the difference. If Chinese sellers are using lax eBay rules and there are no UK government intervention we as law abiding UK SME’s are losing out. The UK taxpayer is losing out.
careful what you wish for
if the UK government intervenes in ebay matters it wont just be to claw back tax from the Chinese
Only if you have something to hide….
we have nothing to hide but were not delusional
British tax is just as good as Chinese tax to the revenue
and much easier to collect
First off, I read the article and understand we are talking about in-country stock-holding foreign companies ie. FBA. But, because you guys are whingeing, I am going to kick it up a notch and give away your countries loopholes.
First off, you have no right to whinge here … many world dominating players ie. Book Depository; Chain Reaction (IRE); Wiggle that exploit our Australian GST import $1000 loophole are UK domiciled (Pay no VAT on exports) and have additional shipping advantages that aren’t obtainable by a traditional S(ME)’s/mum and pops.
1. VAT Import FREE to UK is £15.00 (use to be higher) – Thus ANY foreign company can sell and ship into the UK completely duty free barring the product is importable.
2. There are MANY zero rated VAT items – Children’s Clothing; Books; … I could go on BUT what this means is: You can ship ANY value of these items into Britain and receive a ZERO rating on VAT and Customs/Import Duties (though the latter can in cases still be levied).
3. The LEGAL onus is on the British Consumer to report and pay VAT NOT the foreign importer
Thus, if you are going to continue to whinge, I will continue to list your loopholes. I moved it all offshore a couple of years ago and like any multinational – I don’t pay HMRC a quid! The last time I did my VAT liability was nearing 400k and my earnings were 40. Thus, I switched the proposition … Tax Avoidance is completely legal and the only was you can ever become an Amazon.
You may not think it’s illegal, but the 99 per cent know it’s immoral.
BTW- You should feel ashamed when you personally or your family use any of the free public services offered to you including health and education. This extend to your own children and grandchildren who may reside in this country and any benefit or state help they may receive.
Nor do you have a right or moral or relevant voice to complain about any of these services.
Because you clearly have an issue contributing to it and as you have clearly stated do everything not to pay a single penny.
Your post whilst posted from your angle as being ‘clever’ actually just high lights the sort sighted greed of people who willingly take part in tax avoidance schemes at the cost of society.
If you compare paying taxes you could legally avoid to giving to charity (as it is in current form optional) your argument doesn’t really work. If I don’t donate to cancer research, does that mean I should be ineligible for cancer treatment that resulted in some form from the money put into the charity? Just as an example, I have donated to cancer research on occasion.
More should be done to attempt to force businesses to contribute the correct amount back into the system, but I find it hard to hold it against someone for using the legal tools available to them to their own/business’ benefit.
You may not be setting much of an example but I feel attempting to make them feel ashamed for it is childish.
Mike has posted on avoiding payment of VAT, which you will find big retailers like amazon etc all do actually pay. It’s corporation tax they avoid. Dodging basic taxes when you should and can pay, whilst using free state benefits and services is the same as claiming incapacity benefit and working on the side and playing football at the weekends in my book. Both are cheating the system.