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BBC Panorama – Bilton’s Bargains

By Chris Dawson November 27, 2017 - 11:21 pm

At 10.45 this evening BBC Panorama broadcast details of a sting operation they set up. They were specifically aiming to sell as a Chinese seller on eBay and Amazon with imported goods they smuggled into the country without paying VAT. You can watch The Billion Pound VAT Scam on BBC iPlayer (if you’re based in the UK).

Amazon, eBay and the Public Accounts Committee

The background to the programme is an campaign to raise awareness of overseas sellers, often from China, who evade VAT through various means when selling to UK consumers. eBay and Amazon reported to the Public Accounts Committee in September this year and both pointed out that they act on all reports from HMRC. The marketplaces also stated the obvious that they have limited visibility of who is and isn’t paying their VAT. Even if they confirm a retailer is registered to pay VAT they don’t get to see VAT returns and it’s down to HMRC to ensure VAT is paid.

HMRC reported that the number of online seller from overseas registered for VAT has risen from 700 end of 2015 to 17,537 end of August 2017. There is no doubt VAT evasion happens but HMRC don’t appear to have had the tools to deal with the problem, which is why it was addressed in the budget.

The Autumn Budget

In the Autumn budget, the Chancellor set out a number of VAT measures specifically designed to tackle VAT fraud on marketplaces. They will introduce joint and several liability legislation which will make marketplace liable for VAT for sellers trading on their platforms if they fail to act when HMRC inform them of VAT evasion. As per the the Public Accounts Committee report both Amazon and eBay are more then happy to act if HMRC notify them of problem sellers. On top of that, eBay have from their own internal efforts blocked 893 accounts that HMRC didn’t spot.

Panorama and Amazon

Setting up as ‘Bilton’s Bargains’, Panorama sent a consignment to Amazon and then purchased them as if they were a consumer to demonstrate that they could avoid VAT. However the VAT fraud didn’t take place on Amazon as the goods were already ‘legitimately’ in the EU.

The VAT fraud took place when Panorama imported the goods via Holland into the UK by hiding them within a larger consignment. I have little sympathy if Amazon hold goods in FBA shipped from China, but if goods are already within the EU when they’re shipped into FBA I’m struggling to see how Amazon can decide Panorama’s goods were illegally imported. Obviously VAT should have been charged when they were sold if the business was over the VAT threshold, but how are Amazon to judge this? Plenty of UK retailers trade below the VAT registration level.

Panorama say that research carried out in September suggested 60% of the top Chinese sellers in Europe listed on Amazon did not display a valid VAT number. Amazon told Panorama that they now have VAT numbers that cover 95% of sales from foreign sellers (95% of sales, not 95% of sellers) who use an Amazon warehouse.

Panorama and eBay

Panorama also registered ‘Bilton’s Bargains’ as a Chinese seller on eBay and listed a load of phone covers which they once again imported illegally evading the VAT due. When they listed on eBay a warning would have popped up pointing out that they may need to register to pay UK VAT.

Panorama again posing as a UK consumer managed to purchase just one phone case before eBay shut them down. Panorama claim it was “because Bilton’s Bargains was a new seller”. It wasn’t, it was because eBay detected VAT fraud (twice) and suspended the account. Think about it, eBay don’t generally shut new accounts down merely because they sell something like a mobile phone case or they’d have no sellers left!

eBay tell us that 90% sellers on eBay UK are UK based sellers. Of the remainder, the majority are in the EU. That leaves a smaller percentage of Chinese sellers – 98% of those already have a valid VAT number in place and eBay are working on that remaining 2%. eBay have also made it their policy to enforce the display of VAT numbers for these business sellers, checking them to make sure they are valid.

I’ve met Rob Hattrell, eBay UK VP, several times and he’s always been very clear that sellers who attempt to evade VAT in any way are bad for business. eBay are committed to stamping down on that, hard. Rob has also shown with the huge number of sellers that he’s engaged with by phone, email and hundreds of visits to UK Seller’s businesses that UK sellers are his top priority. Anything that is bad for UK sellers is bad for eBay and that especially includes VAT evading overseas sellers.

  • If eBay was seriously committed to this problem (and Amazon) they would properly verify VAT numbers. When is the bullshit going to end and the real action going to start ? It’s not rocket science.

    • EJ
      2 weeks ago

      @Richard Allen RAVAS

      Richard, I believe eBay could do a lot of things, IF it wanted. They are SAID to see so much, for example 3 sellers/buyers of the same items operating via the same IP address, and in fact selling from the same physical address
      ( so I’m told, via http://www.shiply.com )
      All “3” in each others auctions…bidding, retracting, sometimes winning (not paying) as confirmed by eBay Trust & Safety.
      Umm, trust & safety eh?, Kinda sounds like a COMEDY duo

      shiply.com? The shiply system is set-up to import an eBay item number, in order to “facilitate” delivery or collection. I believe the job is put out to tender, and you are emailed quotes. A very handy system, if all you want to know is the general address…down to the POST CODE, not house number if, as a buyer, you prefer to collect 🙂

    • 1 week ago

      This program was largely flawed from start to finish and puts investigative reporting into the shade.
      1) ‘Foreign’ sellers are not obliged to register for UK VAT if they sell to individuals in the UK. It is the responsibility of the individual UK buyer to declare the goods for VAT and or duty – or the responsibility of Customs to intercept the parcel on landing into the UK.
      2) Not a single mention of the VAT threshold of £85,000 over which all sellers must register – or if under – can elect to register.
      3) What was the £500+ vat cheque offered to the HMRC person based on? Importation of goods value – what?? Was Mr Biltons sales or proposed sales likely to exceed £85,00 in a year?
      4) Do we really believe serious importers can ‘hide’ cartons inside containers loaded with other goods? Just how many speakers and phone cases did Mr Bilton import? The original cardboard box appeared to hold about 150 cheap speakers, his white van was crammed with new large boxes suggesting many thousands of individual product.
      Stop this silly, inaccurate false news. If you are going to do it – get it right and not play to the audience with false headlines.

  • A pub landlord is obligated to check the age of customers. If customers lie then that’s not the landlords problem but the minimum requirement is checking their age. Likewise the minimum requirement is checking a VAT number. The excuse that ‘they may not actually be paying VAT’ doesn’t wash. Punters in a pub may not really be 18…but you can always ask them for ID. Simple. This article is biased.

    • 2 weeks ago

      No…. it’s panorama that was unbalanced. Egg in their face because eBay shut them down and suddenly it looks like they are serious about VAT evasion.

      Sure there are problems… everyone agrees its a real issue, but panorama would have been a better program if they tracked down a real vat evader rather than running a failed sting.

    • james
      2 weeks ago

      if customers in a pub lie about their age, that very much is the landlords problem.
      the landlord has a responsibility to verify age, not take the customer at their word.
      they should check ID’s, and even then, if they fail to spot a fake, the landlord is liable.
      are you picturing a pub full of pissed 10-year olds and the landlord shrugging it off with the excuse “they all said they were 18”?

  • The idea that eBay hasn’t been riddled with this for years is a joke.

  • EJ
    2 weeks ago

    The Billion Pound VAT Scam didn’t paint eBay (or Amazon) in a very good light. Come to think of it, it didn’t do HMRC any favours.

    I only caught the tail end, an interview with HMRC?, but BOY that guy could wriggle…Olympic class, but Richard Bilton (Panorama) was ready for him at every stage, and richard (on behalf of the BBC) even paid his “dues” for the smuggled items.

  • “if goods are already within the EU when they’re shipped into FBA I’m struggling to see how Amazon can decide Panorama’s goods were illegally imported” They can see that a Chinese seller is selling the goods and the goods are stored and sold in the EU with no VAT number. “A diligent economic operator” (L’Oreal v eBay) would check that …. wouldn’t they ?

    • 2 weeks ago

      Watch the program again. Billtons registered as UK company on Amazon….

      They registered as a Chinese company on eBay and got shut down.

      Then panorama had to cobble a program together from two ops neither of which were very good. Sure they illegally imported goods and that’s the main thing they managed to demonstrate and neither marketplace could know that had happened.

  • b
    2 weeks ago

    Amazon are scum they treat their uk agency warhouse staff like dogs

  • No worse than all these mp.s fiddling there expenses all the county council money grabbers with there perks fiddling so whats the difference They just Do it legal. all behind closed Doors to keep it quiet.

  • Richard Allen RAVAS
    2 weeks ago

    Yes the two examples were not perfect (but note they registered a Chinese company at the end of the prog) but anyone who suggests this isnt going on and has not been out of control is deluded. We have many examples of this as has the National Audit office Trading Standards and the public accounts committee. There are traders operating now on these platforms with no VAT number selling goods and evading VAT that are easy to locate. Tax paying users of these platforms also know this to be true. Just denying it doesnt do anyone any favours.

    • 2 weeks ago

      The issue is serious. Panorama was a trashy attempt at a sting that failed. All they managed to demonstrate is that you can easily import goods into the EU avoiding duty.

      As part of the EU there is then free movement into the UK. Whoopee doo… is that news?

      Total failure on the real issue. It’s not like you and I don’t know about the lists of sellers flying about who have been evading VAT in the past. Could they not find one real VAT evader to highlight?

  • Derek duval
    2 weeks ago

    Lets get ready to rumble…

    Well done Panerama for highlighting a massive issue.

    Next programme. Hightlight uk sellers for no vat number

  • Richard Allen RAVAS
    2 weeks ago

    I recall Lamebay defending the Channel Islands LVCR scam. We closed that down and it was illegal despite the excuses on here. The purpose of RAVAS is to highlight and end abusive competition that is based on a tax Scam. Job done.

  • Mark
    2 weeks ago

    VAT numbers may be verified but they are set up as media companies in the uk and many are defunct many years ago. They want to check out the israeli ones as there are getting to be hundreds and they all use defunct Vat numbers

  • John R
    2 weeks ago

    Maybe eBay should pay their fair share of VAT and income tax? Seems somewhat hypocritical that eBay pay virtually nothing in relation to their earnings!

    • 2 weeks ago

      A very fair point….. but remember eBay switched to UK billing for UK merchants last August collecting UK VAT and will doubtless pay UK corporation tax in their next accounts.

      Aim the comment at Amazon but eBay acted without any legal requirement to so a bit late to knock them on this one

    • james
      2 weeks ago

      think it’s a bit pre-emptive to count their VAT chickens before the invoice is settled….

  • northumbrian
    2 weeks ago

    BBC should stick to eastenders or Doctor who
    rather than headlining obscure and complicated issues .
    with no easy answers
    their an entertainment and news broadcaster not HMRC or MI5

  • Need to watch. Bare minimum is that at least it is under the spotlight, but from reading the comments doesn’t seem like a fair sting operation.

  • Toby
    2 weeks ago

    Is it just me or has it become a bit of a pro ebay page here of late? Yes i see plenty of highlights of ebays failings but there always seems to be some positive spin on it!
    Chris….. is Ebay slipping you brown envelopes, because it is certainly starting to look like it. I have been following tamebay for years, and being totally honest… i see a clear siding with ebay of late!

    • alan paterson
      2 weeks ago

      Hi Toby, have you ever stopped to wonder maybe its because ebay ARE great?

      I have always found Chris to write a balanced post.

      ebay have provided me with an income for nearly 13 years so I certainly have a positive opinion. In contrast there are far too may ebay “haters” on here.

    • RustyZip
      2 weeks ago

      Oh god ! Not again Alan……. 🙂

    • EJ
      2 weeks ago

      @Toby

      Hi Toby
      Certainly a few eBay friendly members on this site, and you will obviously know that both Chris, and Dan are/have been connected to “eBay towers”? I think the clue’s in the name “Tamebay”, perhaps TOO “tame”?.

      Personally I can only go by what I see for myself, and that is that eBay will/do look the other way when a shill bidder and/or scammer is exposed.

      To not prevent that scam seller from selling, OR that shill bidder from bidding the 1st, even 2nd time of being reported? could be seen as an oversight, but to be told a dozen times is nothing short of collusion, and a crime…a crime when eBay will then go on to bill the seller, knowing FULL WELL that a fraud has been committed, and that MUST surely be illegal.

  • Wayne
    2 weeks ago

    There is nothing at present to stop an offshore seller sending goods from outside the EU, under the £15 limit, to UK consumers, whilst advertising on eBay. This remains a massive issue and a massive source of lost VAT.

    All this programme is focusing on are sales of goods that a held in the UK at the point of sale.

    The EU is considering ways to stop this, from reducing the low import limit to zero, or requiring offshore sellers to pay VAT.

    • SAM
      2 weeks ago

      LVCR This effects us a lot. 2 UK companies nevermind overseas ones we know send the lot from Switzerland to avoid VAT. they undercut Everyone by misuse of that loophole.

      Exactly how eBay biggest seller done it’s business before they stopped in the channel islands, and you get the boss of eBay UK praising them a few months ago, they did it with VAT avoidance.
      eBay and Amazon know fine well what goes on.

  • Jules
    2 weeks ago

    As a UK seller who has been selling on Amazon and eBay for 8 years, I feel I am qualified to comment.

    My turnover has gone down by 50% since since the Chinese sellers flooded the UK market. So much so that I am no longer VAT registered and get nowhere near the threshold. I am a very small business, but still a business and was still paying HMRC between £1500 and £2000 per quarter VAT. There must be 1000s of people like me who now pay no VAT and think of that revenue that is lost on top of what the Chinese (other foreign sellers are available) aren’t paying.

    In the programme it claimed that Amazon didn’t find out this was going on until 2015. This is absolutely ridiculous. Myself and many, many sellers reported Chinese sellers with no VAT numbers and Amazon, as usual, turned a blind eye. However, UK sellers recently had to go through ‘verification’ which was so hard and strict I know on the seller’s forum that it nearly broke sellers who had their business stopped completely while verification was completed. They literally could not even access their accounts, let alone sell anything. One guy I remember was in the verification process for 7 months and the main breadwinner. Imagine the stress. Where was verification for the oversea’s sellers? Even I, who had all of my ducks in a row, had to cease trading for 2 weeks coming up to Christmas.

    And as for eBay, don’t get me started! I phoned eBay about 2 years ago as I discovered they were overcharging me on invoices for no particular reason and the ‘customer service’ agent’s actual words were ‘we are not worried about you small UK sellers, we have the Chinese sellers keeping eBay going’. I am sure in the programme it said that there were only 2% Chinese sellers and 98% EU sellers, well search for any consumer goods on eBay and see how many UK sellers come up on the first page, I’ll wager, maybe one or two or none!

    And there you have it. In a nutshell! Amazon and eBay have no respect at all for the UK sellers. On top of the 1000s of copied items (and the Chinese using the same images to sell an item for £5 which we use to sell the genuine article for £50) it’s just not worth selling on either platform for genuine sellers any longer.

    Vent over! Thanks for listening.

  • Bob Williams
    2 weeks ago

    Well its clear Chris Dawson & Tamebay get kick backs from Amazon, and eBay to try and do some damage limitation on this subject. Shame Chris Dawson isnt as vocal on other topics which affect sellers.

    Chris Dawson & Tamebay deff in Amazon, and eBay’s pockets.

    • nothumbrian
      2 weeks ago

      never read such utter tripe,
      rational common sense opinion does not mean your a bought man ,
      all things ebay are bad ethos, is pathetic and non nonsensical ,

  • Brer Rabbit
    2 weeks ago

    The real story is what is happening at Rotterdam. You can bet that Ebay and Amazon are not the only place goods evading duty are being sold. There are plenty of B&M shops that could equally be getting their hands on these goods. I would say this is the tip of the iceberg but then that would mean criticising free borders and I don’t think that is in the BBC’s remit.

  • 2 weeks ago

    Biltons’ Bargains were only required to pay the import duty, of £514.74. Their total sales were 1 phone @ £5 and 270 speakers @ £6.99, £2102.00 in total, so they would not need to have been vat registered anyway. Amazon pointed out there was no vat fraud anyway. Curiously, had they vat registered voluntarily when the company was set up, and sold everything at the advertised price, plus vat, the total output vat was £689.40, and they could have offset the £514.74 paying net vat of only £174.66, so the vat office benefited by £340.09.

    • 2 weeks ago

      Actually there weren’t liable to pay any import taxes to HMRC as the goods were imported (illegally) into Holland…

      Once the goods were within the EU (with the assumption that they were legally imported) there is a Customs Union which means they could be freely moved to the UK with no VAT payable to HMRC apart from any due on sales, but also no UK tax to offset!

      I wonder if the BBC paid the tax due in Holland which is the country the VAT fraud took place in?

    • 2 weeks ago

      Also slightly amused at the thought of HMRC working out how to manage the cheque payment through in their accounts… probably cost them more than the five hundred quid in accounting fees 😀

  • SAM
    2 weeks ago

    Does not matter how the BBC does ran their sting. It highlights the Millions in fraud and the fact that genuine UK biz is being undercut and real people are losing their livelihoods and jobs.
    It is a combination of HRMC incompetence and the ease in which marketplaces like eBay and Amazon help facilitate the fraud. Amazon at least asked for a copy of our VAT cert , eBay did nothing as far as I could see.
    Just like the Millions of items defrauded from the mail system, the marketplaces do not take any responsibility as long as they can keep avoiding their tax and book a profit by what ever means possible.

    • 2 weeks ago

      @SAM
      ” book a profit by what ever means possible” ?

      It’s crystal clear to anybody without a… financial interest? that eBay will do anything to make money, even BREAK THE LAW, and eBay’s “cut” ? (AKA the proceeds of crime) is 10%…the FINAL VALUE FEE.

  • Peter Wellings
    2 weeks ago

    The program was similar to the previous tax avoidence Paradise Papers one the reporter did.

    His style, and the BBCs, seems to be to get the general public worked up about tax practices that are entirely legal and explainable.

    In this instance all I could see was smuggling, which is illegal, but happened in Holland.

    Having/displaying a VAT# doesn’t mean a thing. You dont have to,charge vat if you are under the limit, as long as you pay it on the goods you buy to sell, you are legit. He didn’t. He broke the law. Where is th story?

    The story is The BBC broke the law smuggling goods into the EU to have a go at ebay and amazon and make some trashy TV program.

    I am retired , used to import from China and pay tariffs and VAT, and have no axe to grind, jusr annoyed at BBC propaganda trash TV. Standards have dropped for panarama.

  • Tracey Brown
    2 weeks ago

    Re the speakers imported via Netherlands – as netherlands are within EC how did the speakers get imported into Netherlands without Netherlands customs charging VAT then the goods would become in free circulation ?

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