Strengthen Online Marketplace Seller Checks

HMRC’s Online Marketplace Seller Checks do not go far enough and have huge loopholes being exploited by Overseas & UK Sellers.

https://www.gov.uk/guidance/vat-online-marketplace-seller-checks

At present Online Marketplaces such as eBay, only checks an Overseas Sellers VAT number is valid and matches the business name. eBay doesn’t check if the seller is the actual legal owner of the VAT number & business name.

This allows:

  1. Overseas Business Sellers to use and share company names & VAT numbers that do not belong to them.
  2. Overseas Business Sellers to pretend to be UK sellers and use made up company names & address without having their business details verified at all. The seller also doesn’t have to provide a VAT number.
  3. UK Business Sellers can also provide made up company names & addresses. This sort of seller usually sells counterfeit and dangerous goods.
  4. Company names and VAT numbers can be changed daily by a seller on eBay.

Amazon fully verifies a seller business details under the EU Anti Money laundering legislation because Amazon handles all payments.

However eBay does not have to adhere to EU Anti Money laundering legislation because they don’t handle payments; PayPal does.

Recommendations:

HMRC & The Treasury must force all Online Marketplaces to fully verify all UK & Overseas business seller details including:

  • Business Name or Sole Traders Name
  • Directors Name
  • Business Address
  • VAT Number

This information needs to be supported with documents such as Passport, VAT certificates, incorporation certificates, bank statements & service bills.

Online Marketplaces must ensure a sellers business details are displayed, including full company name, address & VAT number. This would stamp out a lot more VAT fraud and help stop the trade of counterfeit, unlicensed & dangerous goods.

The German Finance Ministry has introduced much tougher regulations for Online Marketplaces than the UK.

Reference: Germany set to make Amazon, other online martketplaces, liable for unpaid VAT on domestic and cross-border sales.

Loophole Examples:

1) Dissolved Chinese owned UK registered company still trading on eBay with 7 accounts

IMAXSCAN LIMITED, a Chinese owned UK registered company, was declared dissolved on 29 May 2018.

The company was incorporated on 23 June 2015 and has never submitted any accounts.

https://beta.companieshouse.gov.uk/company/09652330

However, they are still operating 7 duplicate eBay accounts under the dissolved company’s details:

https://www.ebay.co.uk/sch/yuwin110_7/m.html?LH_PrefLoc=1&_sop=16
https://www.ebay.co.uk/sch/yinwin20165/m.html?LH_PrefLoc=1&_sop=16
https://www.ebay.co.uk/sch/happygogo2017uk/m.html?LH_PrefLoc=1&_sop=16
https://www.ebay.co.uk/sch/autact2015/m.html?LH_PrefLoc=1&_sop=16
https://www.ebay.co.uk/sch/electronics2017uk/m.html?LH_PrefLoc=1&_sop=16
https://www.ebay.co.uk/sch/fly-world888/m.html?LH_PrefLoc=1&_sop=16
https://www.ebay.co.uk/sch/sharehappy2017/m.html?LH_PrefLoc=1&_sop=16

2) 8 eBay Accounts sharing the same company name

Below are 8 Chinese eBay accounts sharing the company name HONG KONG FENG YUE LTD & VAT number GB 230567032

Each eBay account list different business addresses. Which leads to the question; Are these sellers’ separate companies who are sharing a VAT number or are they the same company who run multiply accounts on eBay?

Whichever it is, if eBay had fully verified the sellers business details they would all be displaying the same address.

https://www.ebay.co.uk/itm/302809350828
Linlin Ye, Room 1303,Yunshan Poetic Building 2,Baiyun District, 510440 Guangzhou, China

https://www.ebay.co.uk/itm/142386654493
Xin Zhou, 905, Building A8, Junjing Garden, No.5 Qifu Road, Baiyu Distrit, 510405 Guangzhou China

https://www.ebay.co.uk/itm/122725266714
407 Building, No.1 Jingtai Ji Chang Dong Men Stree, Baiyu Distrt, 510000 Guangzhou China

https://www.ebay.co.uk/itm/302554536131
邹乐, Room 1303,Yunshan Poetic Street, 广东省, 中國

https://www.ebay.co.uk/itm/263097424044
杜莎 Haoquan Building Room 308,Jichang Domen Road #1,Jingtai Street 510405 Baiyun District,Guangzhou China

https://www.ebay.co.uk/itm/152541567696
LEI YE Room 601 HaoQuan JingTai Street BaiYun District Guangzhou 510405 Guangzhou China

https://www.ebay.co.uk/itm/183368620583
扬涛 林 408,HaoQuanBuilding,1st Jichangdongmen RD Jingtai St,Baiyun Dist 510405 Guangzhou, 广东省 中國

https://www.ebay.co.uk/itm/152498686949
meijuan xie 408,HaoQuan Building, 1st Jichangdongmen Road Jingtai Street Hong Kong

3) Chinese Seller pretending to be a UK Seller with made up company name and an address that belongs to the Yemen Embassy in London:

https://www.ebay.co.uk/sch/busychanging/m.html?LH_PrefLoc=1&_sop=16
https://www.ebay.co.uk/itm/263570116897

Busy changing
26 Vining Street, London, SW9 8QA, United Kingdom

https://www.yemenembassy.org.uk/contact.html

When you purchase an item payment is made to TIANYU GAO (busy.changing@outlook.com) Paypal Account

4) UK eBay business account selling counterfeit goods

https://www.ebay.co.uk/sch/ibelts5/m.html?_trksid=p3692

This seller is selling counterfeit & unlicensed designer belts at 5% to 10% of their true value, such as this Bentley belt for £16.00 which should retail at £235.00

https://www.ebay.co.uk/itm/163006973230

The seller displays no contact name, business name or address. The account was registered in March 2018. If eBay ever took action against this seller, they could simple disappear without trace.

eBay is full of sellers like this, who take advantage to the very lacked seller verification process which allows them to sell their wares without any chance of being caught.