bypassing VAT thresholds = evasion? - eBay Suspended & PayPal Limited Forums
eBay Suspension & PayPal Limited Forums  
Join Today
Register Subscribe
     

Registration is fast, simple and absolutely free so please, join our community today!


Go Back   Home > Platform Discussions > Amazon

Amazon Amazon Suspension. General discussions on Amazon, suspensions, suspended, blocked, banned and more. Amazon Forum.

Closed Thread
 
Thread Tools
  #1  
Old 10-25-2018
Canadianleaf's Avatar
Senior Member
 
Join Date: May 2017
Posts: 1,269
Thanks: 538
Thanked 227 Times in 164 Posts
Activity: 20%
Longevity: 40%
iTrader: (0)
Default bypassing VAT thresholds = evasion?

In the UK VAT thresholds are $85,000 then you must register for VAT to charge 20% tax on all your sales and remit to the HMRC. Amazon.UK wont collect VAT tax until you enter your VAT number. Many sellers use multiple accounts to bypass this $85,000 restriction. But, you are still liable to the HMRC for VAT on all sales over $85,000.

So if you have 4 accounts, all have $50,000 sales ($200,000 total) none would have collected VAT and you're personally $115,000 over the limit and are liable for uncollected VAT on this amount.

Is there something I am missing here?
The complete step-by-step guide to get back to selling today!

  #2  
Old 10-25-2018
phaz0rz's Avatar
Executive [VIP]
 
Join Date: Nov 2015
Posts: 10,832
Thanks: 2,076
Thanked 4,022 Times in 3,010 Posts
Activity: 0%
Longevity: 48%
iTrader: (2)
Send a message via ICQ to phaz0rz Send a message via AIM to phaz0rz Send a message via Yahoo to phaz0rz
Default Re: bypassing VAT thresholds = evasion?

Sounds pretty accurate to me. Her Majesty is even more ruthless about taxes than the IRS.



Seriously UK guys, a queen? It's time to move on from people being born "royal".
__________________
____________
_______
___
  #3  
Old 10-25-2018
Canadianleaf's Avatar
Senior Member
Threadstarter  
 
Join Date: May 2017
Posts: 1,269
Thanks: 538
Thanked 227 Times in 164 Posts
Activity: 20%
Longevity: 40%
iTrader: (0)
Default Re: bypassing VAT thresholds = evasion?

Quote:
Originally Posted by phaz0rz View Post
Sounds pretty accurate to me. Her Majesty is even more ruthless about taxes than the IRS.



Seriously UK guys, a queen? It's time to move on from people being born "royal".
The forum consensus for Amazon.co.uk accounts is:

1) Report and pay all your taxes
2) Use multiple accounts to bypass VAT

If you bypass VAT you are not collecting VAT and therefore are not collecting taxes you are legally required to do (on sales over $85,000)

If you have $200,000 in sales on 4 accounts and report this number to the HMRC but show you collected no VAT you are liable for the uncollected amount. The HMRC would notice this and audit you. Therefore are UK sellers evading VAT collection or are they not?

Am I not seeing something correctly here?

Id appreciate if someone can give me some insight here
  #4  
Old 10-25-2018
phaz0rz's Avatar
Executive [VIP]
 
Join Date: Nov 2015
Posts: 10,832
Thanks: 2,076
Thanked 4,022 Times in 3,010 Posts
Activity: 0%
Longevity: 48%
iTrader: (2)
Send a message via ICQ to phaz0rz Send a message via AIM to phaz0rz Send a message via Yahoo to phaz0rz
Default Re: bypassing VAT thresholds = evasion?

I was just throwing in my 2 cents. You'll have to wait for UK members to chime in to get any sort of intelligent response on this one.
__________________
____________
_______
___
The Following User Says Thank You to phaz0rz For This Useful Post:
Canadianleaf (10-25-2018)
  #5  
Old 10-25-2018
Subscribed [VIP]
 
Join Date: Aug 2015
Posts: 110
Thanks: 31
Thanked 32 Times in 28 Posts
Activity: 0%
Longevity: 49%
iTrader: (0)
Default Re: bypassing VAT thresholds = evasion?

By bypass VAT what UK sellers are talking about (or should be talking about) is using multiple accounts to avoid having to disclose their VAT number, as the same VAT number across multiple accounts would cause linking.
  #6  
Old 10-25-2018
Canadianleaf's Avatar
Senior Member
Threadstarter  
 
Join Date: May 2017
Posts: 1,269
Thanks: 538
Thanked 227 Times in 164 Posts
Activity: 20%
Longevity: 40%
iTrader: (0)
Default Re: bypassing VAT thresholds = evasion?

Quote:
Originally Posted by chimera View Post
By bypass VAT what UK sellers are talking about (or should be talking about) is using multiple accounts to avoid having to disclose their VAT number, as the same VAT number across multiple accounts would cause linking.
Yes, that is understood. What I am saying is as a seller you are liable to collect and remit VAT to the HMRC on all goods sold over $85,000. These sellers are over $85,000 and NOT collecting VAT.
  #7  
Old 10-25-2018
JamesNorth101's Avatar
Executive [VIP]
 
Join Date: Apr 2013
Posts: 20,073
Thanks: 2,424
Thanked 5,197 Times in 3,996 Posts
Activity: 27%
Longevity: 63%
iTrader: (462)
Default Re: bypassing VAT thresholds = evasion?

Just to point out we do use £ here...

If you run your calculations using $ your going to be a bit off due to the exchange rate.

Quote:
In the UK VAT thresholds are $85,000 then you must register for VAT to charge 20% tax on all your sales and remit to the HMRC
Its not as simple as that. There are lots of different rates that you can apply for. 20% is just the headline rate.

You would be best off talking to an accountant. The forum really isn't the place for detailed tax advise.

Last edited by JamesNorth101; 10-25-2018 at 05:34 PM.
  #8  
Old 10-25-2018
Canadianleaf's Avatar
Senior Member
Threadstarter  
 
Join Date: May 2017
Posts: 1,269
Thanks: 538
Thanked 227 Times in 164 Posts
Activity: 20%
Longevity: 40%
iTrader: (0)
Default Re: bypassing VAT thresholds = evasion?

Quote:
Originally Posted by JamesNorth101 View Post
Its not as simple as that. There are lots of different rates that you can apply for. 20% is just the headline rate.

You would be best off talking to an accountant. The forum really isn't the place for detailed tax advise.
I understand VAT rates vary by item and some are exempt such as books.

Regardless, if you sell over £85,000 and your goods are taxable you are liable for collecting and remitting VAT to the HMRC. By using 10 seller accounts to spread £500,000 of sales to bypass VAT collection you are still liable to collect and remit VAT to the HMRC of any amount above £85,000.

If I told an accountant I had £500,000 of sales for taxable goods he would say: "You are liable to collect VAT on taxable goods over £85,000".

So again, what are UK/EU sellers doing to collect and remit VAT? Are they even collecting?
The Following User Says Thank You to Canadianleaf For This Useful Post:
Lucky100 (10-25-2018)
  #9  
Old 10-25-2018
JamesNorth101's Avatar
Executive [VIP]
 
Join Date: Apr 2013
Posts: 20,073
Thanks: 2,424
Thanked 5,197 Times in 3,996 Posts
Activity: 27%
Longevity: 63%
iTrader: (462)
Default Re: bypassing VAT thresholds = evasion?

Not what I meant

If for example you pay a Flat rate VAT in which case your not paying 20%

You really need to talk to an accountant... The forum is not the place for tax advise.

A company is liable to pay VAT on sales of £85,000. If you have 2 companies set up correctly then each can sell £85,000 although its not a straight forward as that. An accountant can help you with the details
  #10  
Old 10-25-2018
Canadianleaf's Avatar
Senior Member
Threadstarter  
 
Join Date: May 2017
Posts: 1,269
Thanks: 538
Thanked 227 Times in 164 Posts
Activity: 20%
Longevity: 40%
iTrader: (0)
Default Re: bypassing VAT thresholds = evasion?

Quote:
Originally Posted by JamesNorth101 View Post
Not what I meant

If for example you pay a Flat rate VAT in which case your not paying 20%

You really need to talk to an accountant... The forum is not the place for tax advise.

A company is liable to pay VAT on sales of £85,000. If you have 2 companies set up correctly then each can sell £85,000 although its not a straight forward as that. An accountant can help you with the details
If you are using Flat rate VAT or Standard rate VAT you are still required to register for VAT.

"A company is liable to pay VAT on sales of £85,000." Do you mean: "on sales OVER £85,000."?

The consensus i've found is people are using multiple accounts in order NOT to register for VAT so they can exceed £85,000 in total sales. Aggregating sales from all your accounts and exceeding £85,000 would result in a VAT owing on your part and the HMRC could easily see these Amazon disbursements in your bank records

Using a company for each account makes sense. Each account would be owned by a UK company which would retain the earnings and never let itself go over £85,000. You could then pay a reasonable salary or dividends to yourself from each at designated times. Although I don't believe many people are doing this because of the complexity and accounting costs. I also dont know if the HMRC would allow this, but logically it makes sense.

Last edited by JamesNorth101; 10-25-2018 at 07:22 PM.
  #11  
Old 10-25-2018
JamesNorth101's Avatar
Executive [VIP]
 
Join Date: Apr 2013
Posts: 20,073
Thanks: 2,424
Thanked 5,197 Times in 3,996 Posts
Activity: 27%
Longevity: 63%
iTrader: (462)
Default Re: bypassing VAT thresholds = evasion?

This is exactly why you need to talk to an accountant....

Legally speaking its tax evasion if you open up a new account purely to avoid becoming VAT registered. There are legal ways to do it however through Ltd companies.

The forum is not the place to seek that clarification though, a UK accountant is.
Closed Thread



Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
VAT thresholds in Europe SWORDFISH497 Amazon 2 07-31-2018 06:57 PM
Does Paypal put thresholds on how much you can transfer to bank? GStevens PayPal Talk 4 05-04-2018 09:25 PM
FBA velocity review thresholds? amzpro Amazon 3 09-16-2016 01:35 AM
Cracking down on tax evasion LoopHole Everything Else 2 09-17-2011 01:32 AM


Aspkin Group

All times are GMT -5. The time now is 02:52 PM.


Stop the guessing games and learn how you can quickly and easily get back on eBay today!
Read the best selling step-by-step eBay Suspension guide eBay Stealth!
Amazon Suspension? Read Amazon Ghost to get back on Amazon!
vBulletin® Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.
Ad Management by RedTyger
no new posts

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58