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Overseas Amazon Seller investigated by HMRC

Who will pay the backdated VAT.

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I have an overseas amazon Seller whom I complete VAT Returns for.  

They have had their account suspended as they have not responded to HMRC email.  They never received the email in the first place

Amazon based on HMRC instructions have suspended my clients amazon account

My client registered for VAT in 2017 but started to trade in 2016 on Amazon UK and will owe VAT plus Penalities plus will incur my fees dealing with the investigation.  They hard sell around 1K per quarter and do not make much profit in the UK.

It seems HMRC are going after Amazon Sellers and clawing back VAT which is payable from day one of trading in UK.  Many incorrectly assume that its only payable from date of registration. 

This is a fairly new development after the tax law changes making selling platforms liable for their traders VAT.  What are the repercussions if my client just bails out of UK and does not pay the VAT due.    One is that my client will not be able to trade in the UK ever again but will HMRC estimate the VAT payable and make Amazon pay ? 

Replies (7)

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By C Graham
02nd Aug 2018 11:37

why vat registered if so small turnover?

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Replying to C Graham:
By SteveHa
02nd Aug 2018 12:49

No threshold for overseas, OS of the EU sellers.

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By GlobalTax
02nd Aug 2018 14:50

Sorry I should have added the Seller is from outside EU

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By Paul Hawes
02nd Aug 2018 15:20

If people don't bother to pay for correct advice at the time then they are probably going to make lots of incorrect assumptions.

As online platforms are jointly liable I imagine HMRC will ask Amazon for the money. If that happens then your seller will probably have issues selling in any country on Amazon so it's probably in their interest to pay the amount of VAT/penalties due.

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By TOLLey22
06th Aug 2018 09:50

From what i read in the media, Amazon feels it has no responsibility on this.
Amazon view on paying taxes ( not ) is well known

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Nichola Ross Martin
By Nichola Ross Martin
07th Aug 2018 07:55

Best bet is to get the client to fully cooperate with HMRC. If the client does not then surely you need to consider your position under PCRT? HMRC has exchange agreements in place with other countries and if your client is evading tax then HMRC may well start criminal proceedings. Online platforms are a massive problem for tax authorities, hence the joint and several liability rules and Amazon's reaction.

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By Matrix
07th Aug 2018 08:08

I would also advise your PI company if you did not pick this up when you registered the client for VAT or completed the first return.

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