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How much sorrow can one have? Just like the strictness of account review. It is learned that some time ago, many sellers' old Amazon accounts were subject to re-identity verification by the platform. Tracing the root cause behind this, it was mainly because Amazon strengthened the monitoring of the authenticity of the identity information of old accounts in order to promote the compliance process. At present, there is no doubt that with the continuous maturity and differentiation of the cross-border e-commerce industry, both the country and the platform are tightening the review of cross-border trade compliance regulations. However, under such circumstances, there are still some people who try to make profits by exploiting loopholes in cross-border trade regulations. Tens of thousands of UK VAT accounts suspected of address theft!
It is learned that according to a recent report by the British BBC, a British resident living in Cardiff, Wales, has received tens of thousands of letters from the UK Revenue and Customs (HMRC) requesting payment of taxes since November last year. It was reported that as of April this year, the resident's residential address had been used by 11,000 Chinese companies to register for VAT. The resident said he was unaware of this, but because he was worried that the increasing amount would affect his personal property, he reported the situation to the British TV program X-Ray, which attracted the attention of British society and the UK Revenue and Customs (HMRC). According to HMRC's investigation, 70% of these 11,000 Chinese companies are cross-border e-commerce companies, of which 2,356 are in tax arrears. In this regard, an economic crime expert analyzed that after the UK tax reform, since e-commerce platforms started withholding VAT services for overseas companies, some sellers or other organizations wanted to use their registered local UK addresses to bypass the platform's withholding services in order to evade taxes. Many other economic experts also believe that the address theft in this incident is likely to involve tax fraud and other criminal activities. At present, HMRC has not found any evidence of fraud or fraudulent intent. However, HMRC said that it is reviewing the operational procedures for managing a large number of address changes in this incident and will tighten the review of VAT registration for overseas companies in the future. Once the incident was exposed, it also caused heated discussions in the domestic cross-border circle: “Are these local accounts in trouble, or is it that a service provider is illegally using the same local address to register VAT for foreign accounts? If it is the latter, then many domestic sellers may be in trouble…” "I heard that something happened last month and many accounts were blocked..." "You still have to operate in compliance and keep your account safe to make money in the long run!" From the above, it can be seen that if, as the industry speculates, it is because the service provider illegally uses the same local address to register for UK VAT, then many sellers will be affected. As of the time of posting, there has been no news that any Chinese sellers have been affected by this incident , but it is foreseeable that this incident has been widely reported by the British media and has had a wide impact. The UK Revenue and Customs (HMRC) will further tighten its review of tax compliance. UK VAT policy review becomes stricter! It is learned that as the UK VAT registration process becomes more and more complicated, many cross-border sellers currently choose to find tax agents to register VAT. However, due to the uneven level of cross-border service providers, there are endless incidents such as service providers not having the agency qualifications leading to the seller's account being blocked; service providers using shell companies to help sellers register local tax numbers. In March last year, the British media reported that "some Chinese were suspected of using a system called 'soft touch' to register more than 11,000 shell companies in the UK." It was revealed that many shell company addresses were used to register cross-border seller accounts at that time. The purpose was to exploit loopholes in the UK's VAT policy, register companies in the UK, and then use these companies to register local accounts on cross-border e-commerce platforms to avoid the platform's VAT withholding requirements. In this incident, the UK accounts of many cross-border sellers were affected. After tens of thousands of reports of suspected address theft in the UK VAT were made recently, many sellers believe that not only will HMRC further tighten its audits, but Amazon will also inevitably take action against the platform accounts of these companies. In addition, according to sellers’ observation, Amazon has previously issued a directive requiring local accounts in the EU to upload tax data and sales data. Although the UK has withdrawn from the EU, based on Amazon’s execution of the new policy, many sellers believe that UK local accounts are likely to start providing relevant data soon. In general, as the tax policies of cross-border e-commerce platforms change, the platform's VAT withholding policies have become stricter . This type of illegal registration behavior that exploits loopholes in the rules is ultimately not a long-term solution. Compliance operations are the best strategy to maintain a long-term position in the cross-border e-commerce industry. Here we remind all sellers again that they must abide by relevant laws and regulations. When choosing a tax agent, confirm whether it has the agency qualifications authorized by the UK tax authorities and check the registered address of the UK VAT. In addition, if there are sellers on the UK site who have registered a UK local account at Cardiff, Wales , it is also recommended that the sellers check their tax number compliance as soon as possible. Have you heard any related news recently? Welcome to discuss in the comments section~
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