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.
9 Responses
about time, these chinese sellers are destroying the market for honest uk based sellers paying VAT
How enforcable will any HMRC action be?
Maybe soon Amazon will take note of their fictitious trademark registrations for generic goods too
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
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!!!
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 ?
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.