The Daily Mirror has published a story about how Chinese sellers on eBay aren’t paying VAT and how that’s affecting the livelihood of British traders. It’s called: “VAT evading Chinese firms are wiping out British business.”
The story says: “This Christmas could be the last for many British online traders. Slaughtered, wiped out, destroyed. That’s how some of them describe the tide of Chinese rivals that are driving them out of business. The Chinese tactics used are brutally simple: They don’t pay VAT, which means they can undercut homegrown rivals by 20%. In theory, if a business is based outside the EU but has its stock here then is should be VAT registered. The practice is very different, as a look at just one eBay market shows.”
Penman highlights iPad cases as one area where the practice is rife, but I imagine that many of you will have similar tales to tell about unfair competition. This infographic from the Mirror illustrates the issue in the iPad cases category rather well.
Perhaps the media spotlight will push eBay into action on this practice. If truth be told, eBay has not given this problem much credence in the past.
eBay are quoted in the Mirror article. “A spokesman for eBay promised “appropriate action including suspending the account” if sellers are not VAT registered when they should be. He said: “eBay takes VAT compliance very seriously and works closely with HMRC to remind sellers of their legal obligations in this area.”
It will be interesting to see whether eBay follow up on these words.
Do Chinese VAT avoiding sellers in your category compete with you?