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.