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Overseas seller VAT fraud “rife” on eBay and Marketplace

By Dan Wilson November 29, 2016 - 7:36 am

It will be of little surprise, but a Guardian investigation has found that VAT fraud on the eBay and Amazon marketplaces is still prevalent. Despite new powers granted HMRC, and promises from both to cooperate the Guardian says “huge numbers of VAT fraudsters are illegally selling goods tax-free to British shoppers on Amazon and eBay this Christmas.”

And some categories are particularly dominated by overseas sellers. “The market for many goods is now dominated by overseas sellers, says the report. “On eBay, for example, 40% of UK sales of Android phones are to firms registered in China. Meanwhile, Chinese-based companies account for more than 60% of sales of Christmas tree fairy lights on eBay.co.uk.”

eBay said in a statement earlier this month: “We work closely with HMRC to ensure our sellers comply with their VAT obligations. If we are informed by HMRC that a seller is not complying with these requirements, then we will take appropriate action, up to and including permanent suspension.

We have already contacted hundreds of overseas sellers to notify and educate them on the need to comply with the law and we will continue to remind sellers of their obligations.”

Amazon also said something similar in early November: “HMRC is tracking VAT compliance, and under UK law, Amazon is required to disclose to HM Revenue and Customs (HMRC) seller account data on request if HMRC believes a seller may not be compliant. Under the new legislation, HMRC can now inform websites such as Amazon Marketplaces if it believes a seller in in breach of VAT regulations and require that we stop the seller from selling through Amazon.co.uk and that we remove the account“.

Online seller group VATfraud.org: “Despite the new laws, HMRC have shown a woeful lack of action. There are many fraudsters who were reported to HMRC years ago but are still trading, and evading VAT, today.”

The question has got to be: when will it will become apparent to users that VAT dodgers from overseas are no longer trading in such numbers? That’s not the case yet.

  • criticalcricketcritic
    3 months ago

    I have been monitoring Google in China and there have been many reports that on the back of eBay’s announcement earlier this month about VAT compliance sellers have received emails from eBay stating if they are not compliant by Dec 1 their accounts will be frozen.

    We wait with baited breath to see if this pans out.

  • Craig
    3 months ago

    What is the best way to report fraudsters from these marketplaces to HMRC? Feels like we would be doing part of their job for them, but it might help speed things up…

    • glenn
      3 months ago

      HMRC vat report online below , HMRC are pretty useless at the moment and ebay/amazon seem to be doing more than them at the moment , though this is only to cover themselfs , the problem here is hmrc they show very little effort if any

      https://www.gov.uk/report-vat-fraud

  • Chris barton
    3 months ago

    Christmas tree lights

    I think the safety concerns are a bigger issue.

    Safety certification . Probably not

  • dean
    3 months ago

    Fraud on eBay and Amazon is Rife, it’s full of all sorts not just Tax dodgers

  • Ian A
    3 months ago

    The Chinese flooded the uk ebay site with products from 2013, around the same time that cassini came in to helpfully promote sales quantity over quality in search listings..

    Regardless of VAT fraud I’m surprised there’s not been more made of it, they must have killed off so many small UK business re-sellers and have basically taken market share. “Chinese-based companies account for more than 60% of sales of Christmas tree fairy lights on eBay.co.uk.”

    UK buyers don’t even realise who they’re buying from as the page only shows item location, you have to drill right down to the seller info to see its registered in China.

    I guess the only way for UK sellers to compete is to offer products they don’t have or put UK stock with free next day delivery – use what advantages we have

  • 3 months ago

    so we have

    1 HMRC inaction subsidising bent imports

    2 Post Office subsidising chinese small package export postal charges

    remember tony blair telling uk manufacturers/traders that their answer to chinese labour costs being a tenth of ours to get competitive?

  • mark
    3 months ago

    i would estimate half the sales on amazon/ebay are vat fraudelent , a lot of the big chinese sellers now are displaying UK vat numbers but i very much doubt any vat is being paid ,

    one seller on ebay has 4/5 large accounts (3000-5000 feedback a month each ) with a different valid uk vat number for each account , not sure how that works or the seller is spreading his accounts if one or two get taken down he can use the others will he makes more accounts ?

    the good thing is HMRC could easily check vat returns against the sellers sales for that vat period and remove them , but i doubt they have the staff to check

    • Derek Duval
      3 months ago

      How do you know if the Chinese seller is paying VAT?

      Do HMRC come knocking if they dont pay VAT

      Had some Chinese Guy rip off my products…EbayID = dream20130609

      VAt number = VAT number: GB 160977386

    • mark
      3 months ago

      i doubt they pay any VAT and if they do its problably just minimal to keep HMRC to start knocking , a lot of these big chinese vat fraudsters are registered to a accountant in manchester called E BEST OFFICE , i think if HMRC had a closer look at this company it would open up a huge can of worms

    • Derek Duval
      3 months ago

      It cant be that bad that HMRC dont collect VAT for sellers that are VAT registered can it?

      Or is the scale of the problem that bad

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