HMRC targets Etsy, eBay, Amazon, Facebook & Gumtree sellers

RFW

Queenriderbrekke wrote: »

If you apply this then Antique shops, Auction Houses, Vintage Clothes shops would be would not be VAT/taxed.


The difference comes when you are selling 1 antique sideboard inherited against somebody buying and selling items for a profit. Or indeed making craft items to sell.

Well there isn't VAT on antiques and most second hand goods, there's tax on profits for businesses.

JasonLVC

RFW wrote: »

Well there isn't VAT on antiques and most second hand goods, there's tax on profits for businesses.

There possibly is VAT.

If the seller is VAT registered, they would be using the 2nd hand margin scheme for VAT, where VAT is calculated on the margin between cost of buying in good and the selling price to customer. The VAT is not shown on the receipt, so a customer wouldn't know if VAT is charged or not.

RFW

JasonLVC wrote: »

There possibly is VAT.

If the seller is VAT registered, they would be using the 2nd hand margin scheme for VAT, where VAT is calculated on the margin between cost of buying in good and the selling price to customer. The VAT is not shown on the receipt, so a customer wouldn't know if VAT is charged or not.

There are other exceptions too which is why I used the word "most";)
Not totally relevant to this but quite pertinent to the points made. There are a fair amount of items that aren't subject to VAT that people don't know about.
It is another area that needs an overhaul. I can't see a good reason why (most) print books are zero rated and downloads are subject to VAT.

Brooker_Dave

ballisticbrian wrote: »

Do you think the uk government is sophisticated enough to sus out the Chinese sellers who are registered in China and filling UK warehouses with goods from China and dispatching them from England, but just passing themselves off as freight forwarding companies.

They've made no effort so far, they don't seem to care about the Chinese sellers under reporting the value of the goods they import to skip the duty either.

RFW

Brooker_Dave wrote: »

They've made no effort so far, they don't seem to care about the Chinese sellers under reporting the value of the goods they import to skip the duty either.

Not that I think it should be ignored but I don't know how you could cost effectively police this. It would involve investigating a lot more parcels, which would involve more staff and then monitoring the companies that under value.
If they get over those two hurdles they would then have to find a way to prosecute. How does the British government successfully prosecute a Chinese company for tax avoidance? It's easier for them to just borrow a few more billion from China rather than winding them up attempting to bring their businesses to justice.

It's all a crazy system that could be addressed in other more direct ways. Just off the top of my head they could add a postal tax for overseas mail, so at least the sender would be paying British tax that was unavoidable.

If companies around the world are wilfully avoiding tax that governments can't control then they need to find other ways of raising revenue.

ballisticbrian

If companies around the world are wilfully avoiding tax that governments can't control then they need to find other ways of raising revenue.

Now there's a can 'o worms if ever I saw one.

RFW

ballisticbrian wrote: »

Now there's a can 'o worms if ever I saw one.

It's being opened. They have inter government meetings about it.

Brooker_Dave

RFW wrote: »

Not that I think it should be ignored but I don't know how you could cost effectively police this.

All they have to do is visit the warehouses in the UK and audit what's there, it's value when retailed and what value it's been declared for at point of entry.

If it's been under declared at point of import, then sieze the goods, if they've skipped the vat, sieze the goods, problem solved.

There's only a handful of very large warehouses involved.

RFW wrote: »

It would involve investigating a lot more parcels, which would involve more staff and then monitoring the companies that under value.
If they get over those two hurdles they would then have to find a way to prosecute. How does the British government successfully prosecute a Chinese company for tax avoidance?

Sieze the goods sat in UK warehouses.

martindow

JasonLVC wrote: »

There possibly is VAT.

If the seller is VAT registered, they would be using the 2nd hand margin scheme for VAT, where VAT is calculated on the margin between cost of buying in good and the selling price to customer. The VAT is not shown on the receipt, so a customer wouldn't know if VAT is charged or not.

Is that right? I though that anyone VAT registered has to include their VAT number on invoices and itemise the VAT separately for items over a certain value.

lovinituk

martindow wrote: »

Is that right? I though that anyone VAT registered has to include their VAT number on invoices and itemise the VAT separately for items over a certain value.

You don't have to provide VAT details on every invoice/receipt you produce, but you are legally required to provide it if a customer requests it.