Amazon clamp down on Chinese sellers without UK VAT numbers
Earlier this year, in the UK budget, Chancellor George Osborne promised that HMRC would have the powers to go after overseas sellers who were not complying with VAT regulations.
The problem of overseas sellers, often from China, not playing fair on VAT will be well known to most marketplace sellers. But it seems that Amazon is taking action.
According to the Guardian: “The online retailer has been conducting a review of seller VAT compliance in the UK. It is understood to have contacted many Chinese sellers, giving them until the end of the month to provide their VAT numbers.”
It seems that new Amazon UK boss Doug Gurr is keen to avoid any future embarrassment like that which Amazon suffered when VAT abuses were revealed last year. An Amazon spokesperson said: “Sellers are independent businesses responsible for complying with their own VAT obligations. We do offer tools and information to assist sellers with their compliance, but we don’t have the authority to review their tax affairs.”
But it’s nonetheless heartening to see Amazon taking steps to tackle this problem and ensure a level playing field. Many of these abuses are quite obvious to spot and anything which gets more revenues into the UK’s coffers is good news.
We encourage eBay to take similar steps against the obvious offenders too. Once again, it would seem that Amazon is ahead of the curve by taking action.
EBay did take action and vat numbers were copied or non reporting Companies setup….. This is where eBay left it and its made no difference.
there is a lot of USA private label sellers on amazon using UK FBA , i hope they are requesting the same info and not just concentrating on chinese sellers , but this is good news either way
As long as there is checks in place, I purchased an item the other week as a test from a Chinese seller, requested a VAT invoice which came with a fake number on it.
I’ve done this a couple of times and the vat isn’t even calculated properly on the invoice either. Keeping it simple say the item cost me £10 to buy. I requested a vat invoice. I received a fake invoice which also calculated VAT @ 20% as £2.00. They basically just minus 20% from the total sale price #FacePalm. I explained where they were going wrong but they just didn’t get it lol.
The items were ink toner. I actually bought of them again as it was so cheap and I went through the exact same process.
This does not go far enough if Amazon are happy to accept a VAT number without checking it.
Chinese business sellers are using invalid VAT numbers, there are a few VAT numbers registered to companies in the UK that Chinese sellers use. Many use a VAT number registered to a variation of a company called E-BEST in Manchester and the address is a virtual mailbox address.
Valid VAT numbers always have the sellers company name registered against the VAT number followed by a HMRC address for international based companies.
Everything i have said is shown on this website: http://www.vatfraud.org/nepts-and-vat-fraud/
I have reported a Chinese based seller on Amazon for using an invalid VAT registered to the company that is shown on the above VAT fraud site and nothing came of it.
It is just far too easy to fill the oline form to complete the VAT verification on Amazon, unless these numbers are actually checked then they will continue to trade illegally without paying tax.
For all any of us know there could be another company out there using your VAT number to complete a registration, we have no idea if Amazon will flag duplicate VAT numbers in their system or if they actually bother to check if the VAT number is registered correctly to the seller, in my experience it appears that they do not check.
Over the last week many news articles have surfaced in China that Amazon have been phoning their Chinese Seller Central sellers informing them that they need to get VAT registered by June 30 or they could have their account removed (see below 1 of many articles – in Chinese – use google translate):
If Amazon deem it necessary to remove sellers whose actions are deemed not to be in line with their own ethos (as their ethos may have shifted) then Amazon will move the goal posts (remember when e-cigarettes dominated Amazon rankings 5-6 years ago then were banned overnight as it devalued the website or Hoverboards more recently).
Amazon will do whats best for Amazon and if not policing VAT evading sellers was vicariously beneficial for Amazon previously but may not be now they may change their policy.
It appears Etsy are making changes too but as of yet nothing from eBay. Could Tamebay maybe take this up with eBay?
It seems Amazon are only taking action with Chinese sellers that are sending stock direct to Amazon warehouses from China and miss declaring import tariffs and VAT numbers.
Some are also declaring the importer is Amazon.
This is landing Amazon with lots of unwanted VAT & Duty bills. Amazon are rejecting deliveries by some Sellers unless they provide VAT number.
So it doesn’t sound like Amazon are trying to clean up the frontend VAT fraud on their site.
It’s Amazon just trying to protect its own revenues from dubious Chinese sellers getting Amazon in hot water with Customs & Revenue
Sadly Amazon are not contacting sellers because they are illegally selling goods without VAT on the Amazon site….
As someone who lives in the EU, but not the UK, I have had emails from eBay and will soon have 20% VAT added to my listing fees. Etsy also did the same and are already charging the extra. I am registered as a business but trade below VAT thresholds therefore have no VAT number, just a business number for trade.
From a posting above : “Amazon will do what’s best for Amazon and if not policing VAT evading sellers was vicariously beneficial for Amazon previously but may not be now they may change their policy.”
This can cut both ways for if Amazon and eBay are publicly made to feel that they are “doing wrong” by supporting dodgy trade then, by looking after their own interests, they will act.
This campaign against dodgy importers really hasn’t had enough “presence” to facilitate a mood swing with the public . . who, after all, presently care little about how they bought their cheap goods . . they only care they were cheap.
once they register for VAT shouldnt HMRC be chasing these sellers for back dated VAT from previous sales , amazon can easily provide sales figures to HMRC , im pretty sure if i registered for vat 1 or 2 years late HMRC would be chasing me a uk seller for back dated vat and handing out a hefty fine
VAT should just charged at source on all UK sales, on both Amazon and EBAY collected by Amazon and EBAY and paid directly to HMRC, if you registered your VAT number with them, HMRC can easily see what you paid. Amazon and Ebay are more then capable of collecting 20% at source, then all non-VAT payment issues from any sellers, not just Chinesse or American, but also UK based business will disappear over night and a level playing field for all. As usually the obviously easiest and fairest option is not being considered.
I’d say the last thing we want is Amazon and eBay poking their nose into sellers’ tax affairs.
Direct collection would not require eBay and Amazon to know that much about your tax situation- all they would do is pay the money direct to HMRC and issue sellers with a statement saying what was paid.
This would be similar to the PAYE tax deductions- your employer does not know a lot about your personal financial situation other than the amount they pay.
A compromise could be that they only collect the VAT directly at HMRC’s request. Companies with established VAT payment records would not be subject to this, new companies would have it collected at the time of sale.
I’ve heard the EU VAT Unit & HMRC are considering this now