back to article Brit iPad sellers feel the pain of VAT-free imports

A number of iPad sellers based outside the UK are selling cut-price fondleslabs in Blighty after seemingly bypassing UK VAT payments, a Register analysis can reveal. Under UK tax law, sellers have to declare 20 per cent VAT. But El Reg has discovered a number of sellers do not have listed VAT numbers and are selling iPads at a …

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Ebay

Same problem with sellers on Ebay. simple tip .... avoid any company with UK in their name because that means they are Chinese!

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If they are being supplied from a UK warehouse the duty and VAT will have been paid on import into the EC. - sounds like sour grapes to me

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Anonymous Coward

Read the article ... its traders with UK warehouses who are complaining that they are being undercut by people dispatching from China who are not charging VAT and relying on HMRC not intercepting their parcels.

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Wouldn't have gone bankrupts selling iPads?

What's the margin on those? I call BS on anyone being able to run a sustainable business selling iPads - what margin does apple allow them? A small handful of percent?

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Anonymous Coward

Amazon FBA makes it very easy for non-EU sellers to do this and stay hidden

Having traded on Amazon and EBay for many years, I'm certain that they are both complicit in facilitating this with the ease of anonymity for sellers.

The sellers just need to declare a low value on import because the import VAT and duty is much lower than the retail sale VAT.

HMRC could cut out 99% of this method of VAT avoidance by just forcing Amazon and Ebay to publish seller identities, and report back to HRMC sales reports.

No need to chase thousands of dodgers, just make the 3 big companies encouraging it responsible.

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Anonymous Coward

The more reports HMRC receive the more likely they will investigate

https://www.gov.uk/report-vat-fraud

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Pint

A problem all over the world

Australia doesn't charge 10% GST on imported packages less than $1,000 because it cost more to do so than it collects but the local retailers are screaming about that. They scream so loud that number of people are boycotting them because of their spite so their sales just keep going down.

Many states in the US now ask how many dollars worth of things were bought online and then ask for sales tax on that but US sales tax only covers goods and not services and gets very tricky with things like software license.

Of course the worst tax of all is the tax on beer

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Re: A problem all over the world

"They scream so loud that number of people are boycotting them because of their spite so their sales just keep going down."

Given that the usual pricing difference between Australia and the "rest of the world" is such that in the old days one could fly business class or better to San Francisco, spend a week in a nice hotel, buy a top end Mac and fly back to Sydney for less than the proce of buying one locally, I think those boycotting have a point.

New Zealanders had the same problem with anything routed via Australia. I can recall buying software from the USA which cost US$140 landed (including taxes) whilst the local distie was pushing it out the door at more than US$2000.

Explaining that to the software outfit in question lead to them discovering that thanks to the global copyright cartels, they were locked into a circuitous sales route which went from the USA to Britain to Australia to NZ and they couldn't sell their own software directly to the NZ distie without breaching copyright that somehow belonged to someone else. Not long afterwards they managed to break out of that loop and prices dropped precipitously, but it was too late and they fell over in the dot-com implosion (despite being a solid outfit over 20 years old)

Oz disties are still locked in a mentality that they still have "exclusive import licenses" and can price gouge with impunity. Those days are long-gone, along with the Button Plan.

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I hope the Register has one the right thing

They have identified a potential crime. so should report the traders to HMRC for investigation

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This isn't such a bad thing... our company bought a replacement iPad via Amazon, an Air 2 32GB costing £398, and the credit card was debited by Amazon. But the seller didn't provide the requested VAT receipt, and on making enquiries, didn't exist... the company name used was one that was dissolved two years previously, and there was no response to three enquiries via Amazon for details of the trader behind the Amazon advertisement.

Amazingly, a request to Amazon for assistance produced the response that it was nothing to do with them(!), so - as you have probably guessed by now - we formally requested the credit card company to chargeback the entire amount, on the basis not only that VAT couldn't be reclaimed, but that the iPad was worthless as our contract of sale was with the unidentified seller, not with Apple as the manufacturer. The chargeback was initiated, the £398 was clawed back from Amazon via its merchant account, and after being "suspended" for two months awaiting the proof from Amazon of the trader's identity, the card company made the refund and closed the dispute file.

No loss by the company, iPad still works, one stung dodgy trader...

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