Sneaky Little Trick?
Good Friday everybody!
I noticed a little trick some companies are doing, when I see this, I find it is always companies with Chinese names, Chinese owners (nothing against the Chinese here, just an observation).
So, they have a brand, let’s use a real example. Take ASIN: B0B74KXCBY for example, has over 4,000 reviews, by the look of things it is always number 1 in it’s category. Now, the company selling this product started trading this year, and they sell ALL this brands items. Thus, I presume they are not paying VAT as they have not hit the 75,000 in sales yet. So, they pay 0% VAT. This means they can offer a selling price that one cannot compete with as most companies pay 20% VAT. I suspect in a year, the company selling this will cease and a new one will pop up. Again, gaining the 0% VAT.
The problem with this is that it lowers the entire price of the market, so everyone is racing to the bottom price, but it is untenable for most companies due to the 20% VAT a lot of companies have to pay.
What do you think? Am I being all conspiracy theory here? Or is there more to it?
Cheers!
0 replies
Seller_amUAzjvL5uIzu
As its FBA there is no Vat threshold if they are non UK
Seller_OCPQ5x3o5snzU
BRINDREAM LTD
Incorporation March 2021
Dissolved August 2022
Still happily selling on Amazon March 2023
No Accounts ever filed …
Seller_LG5fP0ZTW72qj
There is another possibility as well. If you have a closer look at the reviews, you will more likely find that most of those reviews are not left for the product they are showing for.
Seller_l78koE9kGCu59
… and then we get (at best) a ‘recommendation’ to lower our price to a loss. Even though the rogue seller has long moved to a new account and now the price is messed up forever.
Or, worse, a policy ding for suddenly being classed as “Price Gouging”.
Seller_WnVUArjh9KVEp
I’m all for a more even playing field on Amazon, so the optimist in me would like to forward all this to the Managing Director and to the relevant HMRC department for investigation. The realist in me is already knows…
Seller_OCPQ5x3o5snzU
C2U TRADING LTD
Company number 12818585
Incorporation 17 Aug 2020
Accounts Filed as dormant June 2022
Dissolved Dec 2022
Still trading on Amazon March 2023
Really not hard to find these companies trading on Amazon
Seller_WnVUArjh9KVEp
Is this an Amazon issue or an HMRC issue? Or maybe both?
Seller_OCPQ5x3o5snzU
Corporation Tax is the one they wont be paying either …
Seller_ICqvJVQurZXgc
Alas Amazon may be liable for not weeeding these sellers out however they can point to oh he had a uk address etc. At the end of the day they get their 16% over say 20k sellers and may get pulled up over a couple and pay a fine who wins financially. Its not honest sellers its not HMRC it is AMAZONS coffers.
Also if HMRC were serious about clamping down a small web page were you could report dodgy companies so they can be investigated add 100 investigater and i’m sure the extra vat reclaimed would pay for them in no time. Amazon could of course do this as well but no incentive to as they are making money from the overseas tax dodgers.
