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Amazon in £1.5bn tax fraud row (thetimes.co.uk)
49 points by Jerry2 10 months ago | hide | past | web | favorite | 18 comments

Slightly misleading title. The UK authorities are trying to lay £1.5bn in taxes on Amazon 3rd party sellers, and Amazon isn't helping enough to make that happen. The current title implies that it's Amazon who owes that tax, which isn't the case.

I don't know if they still do it, but some years ago when I lived in the UK and later when I ordered something from amazon.co.uk while visiting, some items such as DVDs, which were marked as "sold by Amazon" were actually shipped by a channel islands (Jersey?) based company. The channel islands aren't in the EU or the UK's VAT system, so by splitting the order into shipments below the UK's import VAT threshold, they could avoid charging VAT. I don't know if that scheme still works, as non-EU businesses that do above a certain amount of EU based trade need to register for EU VAT. (including getting an "EU" prefixed VATIN)

I seem to remember the name of one of the companies Amazon used as "Indigo Starfish."

That's the one!

Now Amazon has a boatload of fulfillment centers inside the UK. Faster shipping time requirements and higher volumes makes it more economical- despite the tax costs- to have their product much closer to the customer.

couldnt agree more...and to top it off they paywalled it...

nothing wrong with a newspaper doing that, you can read it without paying:

> Receive complimentary access to two articles from The Times and The Sunday Times every week

Non-paywalled article: https://www.theguardian.com/technology/2017/sep/13/amazon-an...

> The criticisms were made on Wednesday at a meeting of the public accounts committee, parliament’s spending watchdog, which is investigating online VAT fraud. In recent years overseas sellers, particularly from China, have come to dominate many popular goods categories on eBay and Amazon, illegally selling products into the UK without paying VAT. As a result, many small British businesses have been undercut.

That's definitely a valid concern.

> “Twenty per cent is a large sum of money, and if your competitors are avoiding the 20% you can’t compete,”

Twenty percent is huge in retail trade. Many sellers have single-digit margins. Having a huge player engaged in such behavior on a massive scale means effectively eliminating all competition. They should compete, but on equal terms. They will probably still win, but at the same time contribute to the well-being of the society by paying taxes (just like everyone else).

Similarly, in the US, the Chinese sellers take advantage of the UPU shipping subsidies to artificially undercut sellers from other countries.

"the USPS actually charges China Post less to deliver a package from China into the U.S. than it charges a U.S. business or customer to deliver a similar size package within the 48 states"


Not only that but they provide better service than US shippers to China receive from China Post. (speaking as a US shipper to China)

Just to be clear, what these merchants are doing is shipping into the UK and falsified customs forms. As Borders and Customs can't inspect and assess every single package, they slip through. However, if these companies filled out the forms properly, the end consumer would be picking up that VAT.

Can someone with subscription tell us what it's about?

My guess is that it's about the tax authorities accusing Amazon yesterday of failing to co-operate fully in tackling a multibillion-pound fraud that is putting scores of small British companies out of business.

Another advantage of leaving the EU. We can ditch the silly VAT system.

The UK had a VAT before nearly anyone else in Europe..

It's vastly more likely that you'll have to deal with VAT on all European products in addition to the current products rather than getting rid of the VAT altogether.

Hard paywall. Not cool.

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