Ebay and HMRC

soolin

This thread on another board may be of interest to people on this board:

https://forums.moneysavingexpert.com/discussion/5381092

sjbrun

I'm glad they are cracking down. Ive seen sellers on Amazon sell thousands of items over xmas and have no VAT number. It means they can price things much cheaper but there is little I can do

I know with Amazon they are going to start forcing people to enter a VAT number when turnover hits the limit which is a step forward.

forgotmyname

I do wonder how some companies show on the companies house as not having filed accounts because they are small traders and those that do not have VAT numbers yet one seller had sold over £200k worth on ebay in just 3 months of that year and had sold large quantities for almost 5 years.

soolin

forgotmyname wrote: »

I do wonder how some companies show on the companies house as not having filed accounts because they are small traders and those that do not have VAT numbers yet one seller had sold over £200k worth on ebay in just 3 months of that year and had sold large quantities for almost 5 years.

Personally I suspect that for every dodgy seller who intentionally deceives HMRC there are two others who are just not bright enough to actually understand what they are doing and what they are required to do.

When I did my little bit of advice voluntary work there were those who set out with the sole intention of lying and not bothering with HMRC and DWP but also those who really just didn't have a scoobie about finance , it was completely over their head. Even recently I've been told by someone they would take HMRC to court for telling them they were a business as it was 'laughable' and HMRC/DWP must be 'off their heads'. After all, they only used their house and garage to store stuff that they took to car boot, fairs and sold to people on Facebook/ebay and Amazon , they had no staff, no company name and so were not a business and anyone who suggested they were needed their head examined. (they were bringing in well over a thousand a month). Apparently it was a consensus down the pub that Sainsbury's or Marks and Spencer are a business, a person buying stuff to sell on is not.

Likewise I have been told quite seriously by people that as I sell mainly second hand/vintage/antique items I can't be a business as businesses only sell new goods.

Many many years ago I was an accountant and lost track of the amount of clients I got who had been trading with a business name for years, sometimes with business premises - the lot, who had never bothered to tell anyone. They always thought they could do it once they started making a lot of money, a few thousand here and there surely didn't matter? Then HMRC caught them and issued huge estimated tax bills and they suddenly were faced with having traded for 4 or 5 years and now had 30 days to comply with the supply of full accounts with complete paperwork.

bxboards

I think HMRC is looking in the wrong places.

They seem oblivious to the 1000s of Chinese sellers essentially smuggling goods into the UK, or under-declaring them as 'toys' then warehousing them in the UK. None of these seem to be VAT registerd, and while the item location is in the UK, the sellers are based in China or Hong Kong.

This is a double edged sword, as these people are directly compete and can with genuine HMRC / VAT registered sellers, and can undercut them by at least 20% purely as the smuggling or under-declaration aspect allows them to undercut genuine businesses by 20%. I think until the UK does something about that, we are sleep walking into many many businesses closing. Due to the close relationship the UK is trying to forge with China, I doubt HRMC will be too keen to crack down on the obvious abuse.

sequence

bxboards wrote: »

I think HMRC is looking in the wrong places.

They seem oblivious to the 1000s of Chinese sellers essentially smuggling goods into the UK, or under-declaring them as 'toys' then warehousing them in the UK. None of these seem to be VAT registerd, and while the item location is in the UK, the sellers are based in China or Hong Kong.

This is a double edged sword, as these people are directly compete and can with genuine HMRC / VAT registered sellers, and can undercut them by at least 20% purely as the smuggling or under-declaration aspect allows them to undercut genuine businesses by 20%. I think until the UK does something about that, we are sleep walking into many many businesses closing. Due to the close relationship the UK is trying to forge with China, I doubt HRMC will be too keen to crack down on the obvious abuse.

This is so true. But there's little chance of them doing anything about the chinese sellers, too much hard work for them. They don't have the resources. It's easier to just send letters out to a few names pulled from ebay.

bxboards

sequence wrote: »

This is so true. But there's little chance of them doing anything about the chinese sellers, too much hard work for them. They don't have the resources. It's easier to just send letters out to a few names pulled from ebay.

The crazy thing is that to police this, I do not believe this needs much resources.

Legislation needs to be put into place that once an Amazon Payment account or Paypal account exceeds the annual limit, the account is limited, until a valid VAT number is provided.

Ebay are also capable of applying account limits right now, so I can't see any good reason why they do not limit accounts where there is no VAT number and turnover exceeds the annual threshold.

In many ways, while HRMC turn a blind eye, Ebay also aid and abet.

forgotmyname

Guilty of buying quite a bit from China, waiting for aboiut 40 items at present.

Mostly small cheap items but a few over £40 and never paid a penny in duty, they arrive with low values stamped on them and/or gift.

These items are for me and not for resale,

19lottie82

I actually asked eBay to keep my monthly selling allowances under the pro rata for VAT liability and the CS advisor seemed really shocked, and told me no one had ever asked for that before!

I'm glad they are cracking down on those that don't declare their earnings. I'm a business sellers and submit my self assessment every year, so why should others get away with not doing it.

IMO it's as bad as benefit fraud!

soolin

forgotmyname wrote: »

Guilty of buying quite a bit from China, waiting for aboiut 40 items at present.

Mostly small cheap items but a few over £40 and never paid a penny in duty, they arrive with low values stamped on them and/or gift.

These items are for me and not for resale,

I buy loads from the Far East as well , got a couple of claims open on ALIExpress for items bought at the end of October. Most of my items are below the duty threshold but I did buy some stock that arrived very quickly but I did get charged duty and handling by DHL.

RFW

bxboards wrote: »

Legislation needs to be put into place that once an Amazon Payment account or Paypal account exceeds the annual limit, the account is limited, until a valid VAT number is provided.

I've heard Amazon are doing just that.

I buy from one Chinese company and am happy to pay tax on it when it arrives, they've recently set up a UK warehouse, I'm paying the same prices without tax. The fact is that no one is ever really going to check my invoices enough to notice them and investigate.

It isn't a big leap to work out some system that doesn't lose much money for tax that isn't too difficult. After all it's almost certain that the payment will be being made securely and electronically. A more sophisticated system wouldn't wipe it out but it could help.

If all payment portals declared when a company received payment from another country then it would be easier for governments to see any tax issues whilst payments remained secure.