Copy of HMRC Notice to VAT Evading sellers taken from Amazon forum

Here is a copy of HMRC Notice to VAT evading sellers taken from Amazon forum :

Dear Sir/Madam,

New measures were introduced by HMRC for some businesses established overseas that are required to be registered for VAT in the UK. With these new measures, we may:

· direct a business to appoint a VAT representative in the UK
· require a business to provide a security to HMRC
· rule that an online marketplace provider and/or a UK VAT representative are jointly and severally liable, together with the business, for any UK VAT debts that become due.

You can find more information on the New Measures by visiting and searching for ‘overseas businesses using an online marketplace to sell goods in the UK’.

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

Should you wish to discuss this with a member of the online selling complaince team, as postal communications can take some time, you may prefer to correspond by email. Of course, there is no problem if you prefer to correspond by post in relation to this matter and I will assume this to be the case if you do not respond to this email. However, if you would prefer to correspond by email, HM Revenue & Customs requires a director of the company to confirm in writing that they understand accept the risks involved in using email. It is important that you have assessed the risks of using email to send information or to receive it. If you use email to send HMRC information, you do so at your own risk.

HM Revenue & Customs takes the security of personal information very seriously and recognises that it has privileged access to data, which we endeavour to protect. Therefore, in order for us to respond to any queries by e-mail, we need to obtain written confirmation that the director.
Has no objections to corresponding by email (if this includes agents or representatives – please specify), and
Understands and accepts the risks associated with e-mail, and
Has no objections to us sending information concerning the details of the company

HM Revenue & Customs will de-sensitise information wherever possible (e.g. quoting only part of unique reference numbers) and we are happy to discuss how you may do the same but still provide the information we need. However, if you would prefer us not to respond to your enquiries by email (e.g. because other people have access to your email account) we are happy to respond by post. For further information see: HMRC Privacy Policy

Therefore, if you accept the security risk and wish to correspond by email, please reply to this email advising that, although you are aware that email correspondence is not secure, you wish to use it. That will then give me authorisation to provide full details of my enquiry by email. Please note the email capacity has been limited to 8mb. Therefore, if the information to be supplied is more than this, separate emails, each less than 8mb, will be required.

General information regarding UK VAT can be found on our website, at

Kind regards

On Line Selling Compliance Team

Amazon Notice to VAT Evading Sellers

jailHMRC & Amazon issue “GET OUT JAIL FREE CARDS” to VAT Evading Overseas Online Retailers. The card allow them to:

  1. Evade all unpaid VAT.
  2. Continue trading for 30 days.
  3. Keep their stock.
  4. Withdraw all their funds.
  5. Keep their highly ranked listings.
  6. Relist their old stock on their highly ranked listings under a new company.

Well done HMRC !*&!$$$

We have seen a copy of the notice Amazon are sending to VAT Evading Sellers.  Amazon sends the notice once they receive a liability notice from HMRC.

It is completely beyond belief that HMRC are not seizing stock, freezing assets and permanently removing the sellers listing from the Amazon catalogue.

Doesn’t HMRC realise that these sellers will simply remove their stock, setup a new company and send the stock back into Amazon and sell it on their old highly ranked listings. And avoid paying any of the unpaid VAT from their old company.

What is sort of deterrent is this? What on earth is going through HMRC’s mind!!?

We can’t believe the complete incompetence that HMRC are still showing in tackling online VAT Fraud.

It makes our blood boil.

Here is the Amazon notice:


We received a notice from the UK tax authority, Her Majesty’s Revenue and Customs (HMRC), indicating that you do not currently meet VAT requirements in the UK.

Sellers on Amazon must comply with all applicable laws and regulations. As a result, you may no longer sell on and you are no longer allowed to use our Fulfilment by Amazon (FBA) service in connection with

Please ship any open orders and submit a request to remove any FBA inventory from our fulfilment centers in the UK (

If you do not submit this request within the next 30 days, we may dispose of your inventory.

Additionally, you may no longer offer to ship items into the UK on any of Amazon’s European marketplaces.

You may also no longer use our FBA service to ship items into the UK. Your shipping options have been restricted accordingly.

If you have funds in your Selling on Amazon payment account, they will be available after any amounts for A-to-z claimsor chargebacks on your orders have been deducted. This usually takes about 90 days, but funds may be held longer by Amazon Payments Europe S.C.A.

Please contact HMRC at to resolve your VAT status.

Once HMRC informs us that their notice has been withdrawn, we may allow you to sell on again.

Please let us know when you resolved your VAT status with HMRC by emailing

To learn more about UK VAT obligations for overseas sellers, visit the UK Government website (

For information on tax advisory firms with discounted rates for Amazon sellers, visit our VAT Resources help page (


Amazon Services Europe

Stop subsidising Chinese post via United Nations Universal Postal Union (UPU) terminal dues.

Chinese sellers are being offered hugely subsidised postal services known as “Terminal Dues” by the United Nation’s Universal Postal Union (UPU) allowing Chinese retailers to sell goods including postage from China to the UK for less than the stamp would cost a UK retailer to send the same item from the UK.

UPU class China, the second biggest economy in the world, as a Category 3 Economy along side Gabon. This entitles Chinese online retailers huge international postal discounts. Packages can be sent to the UK for as little as 20p. And it’s the UK mail service who picks up the tab.

In 2013 Chinese online sales reached $314 billion, or 35 percent of all world e-commerce sales (by comparison, U.S. online sales were $255 billion).

We took a look at a set of football shin pads on eBay that can be purchased for as little as £1.50 including express delivery from China to the UK. They will also be VAT Free under LVCR.

To send the same football shin pads from the UK would cost £2.58 for a Royal Mail 2nd Class package stamp. If a UK retailer sold the shin pads for £1+VAT plus delivery the total cost would be £3.78. That is more than 2.5 times the price the Chinese seller is able to sell the same product to the same UK consumer.

When the Chinese packaging enters the mail system in the UK it is handled like any other package and it is costing the UK Postal Service of tens of £millions each year, which translates into costs for U.K consumers.

It not only disadvantages UK retailers in their competition with Chinese Retailers, it costs the U.K government millions of pounds in lost customs revenue.

The UK government must stop the United Nation’s Universal Postal Union (UPU) “Terminal Dues” subsides for Chinese Online Retailers.


1) Crisis in The Mail: Fixing A Broken International Package System – Analysis:

2) Stop Subsidizing Foreign Postal Systems, for Economic Fairness and National Security:

3) The United Nations is helping subsidize Chinese shipping. Here’s how:

4) Your Chance to Weigh in on Low Postal Rates for China Sellers:

5) Universal Postal Union (UPU):

HMRC handed out 7,185 VAT numbers to Overseas Online retailers!!

HMRC have just released a press statement “HMRC tackles online VAT fraud in time for Christmas. They have handed out 7,185 VAT numbers to Overseas Online retailers in the last year, that’s a tenfold increase in last year’s figures of 695 due to their crackdown of Online VAT Fraud.

However reading between the lines is seems to be desperate attempt by HMRC to get some positive PR and be seen doing something positive in tackling the online VAT fraud they have ignored for the past ten years. The press release simply proves Online VAT fraud is enormous with 7,185 previously unregistered overseas retailers deciding to register for VAT.

It’s worth noting our comments in FT & The Guardian on the HMRC news:

The Guardian – MPs poised to investigate VAT fraud on Amazon and eBay
The Financial Times – Online sales clampdown nets VAT registrations

Lets hope HMRC’s next press release is more news worthy such as; “HMRC close down 7,185 oversea’s online VAT Evading retailers on eBay & Amazon” !!

HMRC have some serious questions to answer;

1) How much undeclared VAT has HMRC recovered from these previously unregistered online retailers?

2) How many of these retailers have declared on their VAT registration forms that they have made no previous undeclared sales?

3) How many of these retailers have HMRC asked to appoint a VAT representative or provide a financial guarantee?

4) How much VAT in now being collected from these previously unregistered retailers?

5) How many Joint and Several Liability notices have been issued to eBay & Amazon for non VAT compliant online retailers?

6) How will HMRC monitor these retailers VAT Returns are true and correct?

One must ask themselves is HMRC handing out VAT numbers without any due diligence or investigation into the retailers previous online trading history?

Great PR stunt HMRC – doesn’t wash with us!

Amazon launches new VAT Compliance Tools for VAT Evading Sellers

Amazon UK have now taken measures to help VAT evading sellers understand what VAT compliance is and whether they need to register for VAT.

They have teamed up with KPMG who have provided an online “VAT registration litmus test“.

We tested the tool and there seems to be some flaws in it. It doesn’t work for NON EU companies (Chinese) with EU stock as it doesn’t ask where your business is located. It also says that you need to hit the VAT threshold before registering for VAT. There is no VAT threshold for NON EU companies. We find the tool completely confusing to use with a very badly designed results page. Hope KPMG are better accountants than web developers.

Perhaps they should think about renaming it from “VAT registration litmus test” to “VAT registration ambiguity test”!!

We launched our own simple test “Am I committing VAT Fraud in the UK?” several years ago. OK we haven’t spent much on it but it does work for NON EU companies. It’s not rocket science!!

We are very sceptical about the reason why Amazon are now doing this. It’s certainly not because they have a moral conscience for being part of the £7.5billion hole they have caused to the UK economy and online businesses. Amazon are only doing this to protect their own revenues and shareholders.

Is Amazon’s time is numbered? Is the noose tighten around their necks for being part of a fraudulent supply chain? They know the main bulk of their European fulfilment operation is built around dispatching goods for Chinese VAT evaders. Amazon’s bottom line is going to take a major hit once the VAT evaders are shutdown.

The only reason why Amazon have been able to get away with it for so long is because of HMRC’s complete incompetence in shutting this fraud down. We have seen a whole host of new policies and announcements but have seen very little action in actually shutting down these VAT evaders on Amazon & eBay. HMRC needs to up their game.

Lets hope the EU & UK take Amazon to court and make them liable.

Here is the headline that appeared on Amazon Seller central:

New Tool and Resources Page for VAT Information

23 Nov 2016
Selling your products on the UK and other Amazon European Marketplaces can help you grow your business. To set up your business for international success, one of the important considerations to keep in mind is how you manage Value Added Tax (VAT). If you’re selling into an EU country from outside EU, it’s essential to be aware of any potential VAT requirements.

Take the newly launched Litmus Test to assess your VAT registration needs

To make compliance easier, it’s important to know which specific countries you’re selling into, and to have an understanding of their requirements in those countries. The VAT rules for every EU country are different. But there are some basic factors that will help determine whether you will have to register for VAT within a certain country, including:

• Where you are based/established
• From where you ship goods into this country
• Where your customers are based
• Whether your customers are consumers or businesses
• The level of your sales

You have a specific example in mind and don’t know if you need to VAT register or not? Take Litmus test and find out now (

Visit our new VAT resources page to learn more about VAT compliance requirements

There are some precise steps you’ll need to take to register and file your VAT returns. As an example, here’s what someone selling into the United Kingdom would need to do to be compliant:

• Register for VAT
• Charge the correct amount of VAT to UK customers at checkout and issue correct invoices where required
• Submit your VAT returns by the due date
• Pay any VAT due to HMRC
• Keep proper VAT records

This is just an example of the steps required in one country — while the general process is similar elsewhere, you’ll need to have an understanding of each country’s requirements before you start selling to customers located there (and charging them VAT). Visit our VAT resources page ( to learn more about VAT compliance requirements in the UK.

Autumn statement tackles VAT Fraud via Fulfilment Houses

The government has just announced in the Autumn statement the Implementation of the Fulfilment House Due Diligence Scheme in 2018 to tackle VAT fraud by overseas businesses selling goods via online marketplaces.

Lets hope Amazon Fulfilment will be held liable of all VAT Fraud being committed from its warehouses. Amazon “Should have known or would have known!!!”

In addition to that the government have given Customs and excise officers new powers to inspect goods.

Full statement here:

4.3 Implementation of the Fulfilment House Due Diligence Scheme

As announced at Budget 2016 and following a consultation on the scope and design of the scheme, the government will legislate in Finance Bill 2017 to introduce a new Fulfilment House Due Diligence Scheme in 2018. This will ensure that fulfilment houses play their part in tackling VAT abuse by some overseas businesses selling goods via online marketplaces. The scheme will open for registration in April 2018.

6. Avoidance and evasion

6.2 A penalty for participating in VAT fraud

As announced at Budget 2016 and following consultation, the government will legislate in Finance Bill 2017 to introduce a new and more effective penalty for participating in VAT fraud. It will be applied to businesses and company officers when they knew or should have known that their transactions were connected with VAT fraud. The penalty will improve the application of penalties to those facilitating orchestrated VAT fraud. The new penalty will be a fixed rate penalty of 30% for participants in VAT fraud. This will be implemented following Royal Assent of the Finance Bill 2017.

6.3 Power to examine and take account of goods at any place

The government will introduce legislation in Finance Bill 2017 to extend the current customs and excise powers of inspection. This will amend the Customs and Excise Management Act 1979 and enable officers to examine goods away from approved premises such as airports and ports, to search goods liable for forfeiture and open or unpack any container. This will take effect from Royal Assent of the Finance Bill 2017.

Amazon UK bans incentivised reviews

Amazon have just updated their Review policy on Amazon UK & EU. No more free giveaways in exchange for a review.

Chinese  Seller using this technique to boost their product ranking and sales.  Seem’s like Amazon are taking review manipulation seriously.  Shame they don’t take VAT Fraud seriously.

Since Amazon’s announcement yesterday it seems that the mass of Amazon Review Facebook groups have already found a way round the new rule:


Here is the headline in Amazon Seller Central:

Additional information about incentivised review policy
22 Nov 2016

Amazon recently updated its policies to prohibit incentivised reviews, including those posted in exchange for a free or discounted copy of the product.

We consider a review to be incentivised if you have influenced or can influence the review directly or indirectly, including by monitoring whether a review is written and providing or withholding any future benefit based on whether a review is written or the content of the review. Below are a few examples where a review is considered incentivised and is not permitted:

  • You provide a free or discounted product, gift card, discount, cash payment or other compensation in exchange for the review.
  • You provide or withhold free or discounted products or other benefits in the future based on whether the buyer writes a review.
  • You use a review service where reviewers’ continued membership depends on writing reviews.
  • You use a review service where you can rate buyers based on their reviews.
  • You use a review service where customers register their Amazon public profile so that you can monitor their reviews of your products.

Incentivising customer reviews violates our policies and may violate the Federal Trade Commission Act.

The following actions are generally allowed, provided you comply with the above restrictions:

  • You may offer discounts that are generally available to all Amazon customers, such as Lightning Deals.
  • You may give out free products at trade shows, conventions or other similar venues where you are unable to monitor whether the recipients write a review or provide or withhold any benefits based on whether a review is written or the content of the review.

The above changes apply only to product categories other than books. We continue to allow the age-old practice of providing advance review copies of books.

£7,500,000,000 in lost revenue for UK companies, due to the online VAT Fraud that HMRC are failing to stop

The Rt Hon David Gauke MP announced that online VAT fraud accounts for up to £1.5billion of the total VAT gap. However it’s costing a lot more than that; £1.5billion of evaded VAT equates to £7.5billion in lost sales revenue for UK companies.

These UK companies are the ones funding HMRC and paying the £2.4 million pension pot for the most useless ex CEO of HMRC ever; Lin Homer.

The missing £7,500,000,000 is ending up in Chinese bank accounts without any VAT being paid. It’s also completely disappearing from the UK economy with no benefit to anyone other than the VAT Evaders and Amazon & eBay shareholders who are profit from vat fraud.

No corporate tax is being paid on the profits of the missing £7,500,000,000, no PAYE or NI is being paid on staff wages, no staff wages are being paid, no rent is being paid to landlords, no warehouse rates are being paid to local councils, no money is being spent on office furniture & equipment, no tea is being bought for the office, no pay packets are being spent down the local boozer on a Friday night, no kebabs are being bought at the end of the night and no taxi fares being paid to get home.

Instead, UK companies are going bust, staff are being made redundant, warehouses are being left empty, mortgages are going unpaid and the UK benefits bill keeps rising to astronomical levels.

These UK entrepreneurs have paid more Corporation tax than Amazon & eBay have ever paid.

We met with The Rt Hon David Gauke MP on 30th October 2015, who at the time was Financial Secretary to the Treasury, but has now been promoted to Chief Secretary to the Treasury.

At the time of our meeting he was completely unaware of this multi £billion Online VAT Fraud. He listened to us and got the wheels in motion with new legislation. We think our press coverage & meetings with the Heads of the EU VAT Unit helped.

However HMRC are still woefully slow and way behind the curve in taking effective action. HMRC are putting UK entrepreneurs out of business and are having a catastrophic effect on the UK economy as they fail take action against the VAT evading sellers.

HMRC are now issuing thousands of VAT numbers to NON UK sellers who have been evading VAT for years.

HMRC have failed to make a single prosecution for Online VAT Fraud in the past 5 years.

How much more pain do UK businesses have to suffer before HMRC take decisive action and stop the very crude and easy to spot fraud?

By allowing VAT Fraud to continue HMRC has created a huge market distortion in unfair competition and pricing for UK businesses. HMRC are responsible for allowing the marketing distortion to continue.

The key principle of the EU VAT Directive is that Member States (HRMC) are obligated to prevent VAT evasion, avoidance, and abuse to maintain non-distortion and fiscal neutrality of the market.

HMRC are clearly in breach of this principle and need to be held to account for the damage they are causing.

How much longer do UK businesses have to wait for HMRC to level the playing field?


UK Sellers v Chinese Sellers Rugby Match. eBay & Amazon staff & shareholders are cheering China on. HMRC are refereeing & the linesmen. Guess who is paying for the match and which side UK Sellers are on?

Here is The Rt Hon David Gauke MP full statement after the 2016 March Budget:

(Quote from HMRC Fulfilment House Due Diligence Scheme.PDF)

“The growth in online shopping has meant the average UK consumer can get goods faster and cheaper than ever before. According to a recent British Retail Consortium report, more than 20 per cent of non-food retail spending occurs online in the UK. This growth in online e-commerce has benefited the wider UK economy but has also left it open to severe abuse.

Non-EU traders who sell goods (located in the UK at the time of sale) to UK consumers, mainly via online marketplaces, are not always paying the correct VAT and duty to HMRC. These goods are normally shipped to the UK prior to sale and stored in fulfilment houses close to their final delivery point. This abuse has grown significantly and now accounts for £1-1.5bn of the total VAT gap. These overseas traders are unfairly undercutting all businesses trading in the UK, abusing the trust of UK consumers and depriving the government of significant revenue.

The government has announced at Budget 2016 a comprehensive package of measures to disrupt and deter this 21st century fraud. We are targeting non-compliant overseas traders themselves by making them appoint a UK tax representative who will be liable for their VAT and/or seeking a security. If these traders fail to comply and online marketplaces do not help stop the abuse occurring, the online marketplaces themselves will become jointly and severally liable for the unpaid VAT. We will be working with international partners to try to develop solutions to this problem that affects all major economies. Work has already begun on engagement with the EU and OECD on this matter.

The Fulfilment House Due Diligence Scheme complements the above measures, equipping HMRC with the tools it needs to tackle this fraud. The government will make sure fulfilment houses who are part of this scheme perform proper due diligence on the goods that they fulfil. This will ensure that HMRC can target those traders who use this business model to undercut legitimate business and protect revenue.

This consultation will ensure we minimise as far as possible the scheme’s impact on legitimate firms that import goods. It is therefore crucial that any business that is involved in storage, breaking bulk, unpacking, re-packing and/or subsequent delivery to customers of imported goods responds to this consultation. I hope that you take the time to respond fully. Your responses will help us to ensure this scheme is designed in a way that best meets its objectives, including ensuring the costs faced by firms are minimised.”

Amazon’s Second Letter Warning Chinese Sellers to become VAT Compliant

Further to our report yesterday. It seems Amazon have sent out a second letter warning Chinese sellers to register for VAT.

This news article on was published on the 1st November 2016 on Chinese website

We’ve used Google to tranlate it:

Amazo second letter VAT warning letters you received it?


Yesterday, many sellers reflect receive Amazon message, the second official warnings need to register VAT. Compared to the first reminder VAT registered, the Amazon’s attitude is more like the last notification: VAT registration is imperative, the platform is likely to close the VAT regulations do not meet the HMRC account.

We analyze the content of messages, Amazon express what information:

1, the United Kingdom (UK) value added tax (VAT) further regulations came into effect on September 12, 2016. The new Act came into force, which means that the UK’s Revenue and Customs (HRMC) have a greater right to dispose of overseas sellers to evade VAT, VAT compliance check has begun, your VAT job done right, it is sufficient to deal with inspection;

2, if the Royal Tax and Customs (HMRC) believe a seller may exist non-compliance, Amazon seller account data need to be selected in accordance with the requirements to disclose.

What is the situation of non-compliance? The first is not yet registered VAT, Amazon has said that the first reminder: June 30, Amazon’s British Grand Prix seller must submit a VAT tax number in the background, otherwise it would not rule out the risk of facing title; followed by a VAT registered but did declaration has been made or done zero reporting, underreporting sellers; in addition, each VAT tax ID information requires a consistent and sellers Amazon account information so that multiple accounts sharing with a VAT tax number not only illegal, but also may lead to an account associated with so do not borrow another VAT tax number; in addition, the use of false heading clearly is non-compliant.

3, HMRC can now issue a notice to the Amazon store. That is, HMRC can not seek to inform the implementation of the Amazon seller list, and the right to turn off corresponding to the Amazon store. At the same time, HMRC the right to request platform jointly and severally liable. In order to avoid hefty fines may cause joint and several liability, Amazon seller inevitable combating tax avoidance.

4, in order to avoid illegal VAT account is disabled due to the risk, the seller should take appropriate action as soon as possible. VAT registration has not been completed, you should promptly consult a tax official, as required;

5, should be entered in the VAT code available immediately to the seller Amazon seller account information in a timely manner to the Amazon filing VAT, the VAT does not provide information to avoid being in the background HMRC action.

In fact, China’s Amazon sellers VAT really worry about nothing more than two points. The main thing has been the low-cost advantage will be deprived of, worried about the situation of decline in cross-border transactions. But this, sensible seller said, although the tax compliance of the pain, but the industry can take to eliminate the price war atmosphere, clean-up of cross-border electricity supplier has long accumulated tax issues, helps the internationalization of Chinese brands. Another point of concern is that if the VAT is not compliant, really lead to the account being closed, which is the seller want to see the solution as soon as possible by the VAT is still regulatory compliance operations.

It is reported that most of the British Grand Prix is ​​already underway VAT registered seller and subsequent tax returns in this small series to remind the seller to protect their VAT accounts, industry sources told Tracy: If freight shipments heading VAT borrow seller, the seller C79 proceeds big tax bills, but a small quarter sales of items when reporting, it may be the Inland Revenue Department came to the door.

But not before VAT registered seller, not only during the peak season to be grappling with may be checked, but also distracted to register, as performed earlier.

VAT is a popular trend, Amazon is also committed to move more compliance-oriented platform. The seller should pay attention to this matter, because if you neglect cause really account was closed, it was a rude awakening.