Are Chinese Amazon sellers getting HMRC letters?

By Dan Wilson February 15, 2017 - 6:01 am

Last year, in the UK Government budget, HMRC was given powers to tackle VAT avoidance by overseas sellers trading on UK marketplaces. The Finance Act came into force last Autumn and it seems like HMRC may be acting with the new powers and contacting Chinese sellers via emails asking for records and action on compliance.

We wrote about the new rules here last year: HMRC now has new powers to tackle overseas sellers dodging VAT.

And a discussion on an Amazon forum suggests that HMRC is currently emailing Chinese marketplace sellers asking for information to verify that they’re compliant with UK VAT law. One posts includes the text of an email they claim to have received from HMRC. It’s been shared by a poster who says they are a seller based in China.

The reported text, which you can find here, says:

“I now require you to read the attached letter and register for UK VAT. Can you please notify me by 16 February that this has been done and provide me with a copy of the reference.

I also wish to review the following business records:

· Annual accounts and bank statements
· Books of account: sales and purchase daybooks, cash books, petty cash books and ledgers
· sales and purchase invoices
· A brief overview of the business and its main activities to include when the business commenced and when it started to sell goods within the UK market.
· Import Records
· Completion and return of the attached Import Questionnaire”

It’s vital to stress that this is just a report on a forum and we haven’t been able to verify that it’s accurate or true. But if it is a genuine communication from HMRC to a Chinese seller it’s heartening to see that they making use of their new powers and (hopefully) now ensuring more sellers from overseas are complying with UK VAT laws.

  • JC
    5 years ago

    about time, these chinese sellers are destroying the market for honest uk based sellers paying VAT

  • 5 years ago

    How enforcable will any HMRC action be?

  • 5 years ago

    Maybe soon Amazon will take note of their fictitious trademark registrations for generic goods too

    • glenn
      5 years ago

      if they dont reply HMRC can contact the amazon to close there account
      a lot of chinese sellers are now closing old vat fraud amazon accounts and opening new ones

  • Bryn
    5 years ago

    Chinese sellers wont go away. Competition wont go away. In our markets they can undercut us by 100%+ easily so even if they end up paying VAT it wont make any difference on competition front. The key is to compete on quality and creativity and not price

  • Mac
    5 years ago

    Yes but we have found that Chinese sellers are piggy back on our Amazon listings and then sending out inferior products – e.g. we sell 100% Cotton products and the Chinese seller is sending out cheap badly made see-through polyester products ( we ordered some to find out). We reported this to Amazon and also all the other five Amazon ID’s this Chinese seller was selling under and Amazon have done nothing.
    It is very short sighted of Amazon not to crack down as we are getting the complaints and the Bad Reviews on the products and no more sales.
    HMRC should be following this up as it is worth about £1.5 billion a year, which is a lot of doctors and nurses!!!

    • Bryn
      5 years ago

      Chinese paying VAT wont change them piggy backing

      If they start paying VAT that is great for UK tax receipts but it wont resolve issues sellers are facing.

      They will still be cheaper, piggy back, sell crap, miss sell items etc etc

      It wont be long before Amazon come up with an all in one solution for these guys to start selling their items directly on worldwide sites very easily and perfectly legitimately. Things will only get more competitive and tougher going forward and anyone who thinks the chinese sellers are going away is deluded

  • 5 years ago

    This does not make any sense the buyer should be aware of import duties and VAT at the point of arrival in the UK ?

    It has nothing to do with chinese sellers ?

  • martin
    5 years ago

    Sorry Paul, not true. Buy any Chinese item on Ebay, and it is a 99%+ chance it will be sent as a gift (fraudulently) and consequently is not subject to duty or VAT as a personal import, unless at a value higher than many of the goods sold.

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