Sellers urgently check themselves! UK VAT registration address exposed

Before every peak season, Amazon will come up with some strange things, which are actually some measures taken by Amazon to improve buyers' shopping experience and strengthen the compliance of the platform.

Some time ago, many old sellers were asked to re-verify their identities, which made the sellers busy and confused. The personal verification channel was just opened recently, and the sellers didn’t have time to be happy for a few days before the UK site VAT went wrong! !

Recently, according to the British media BBC report: Dylan Davies, a British resident living in Cardiff, Wales, has received tens of thousands of letters from HMRC requesting payment of taxes since November last year.

Up to now, the resident's address has been used by more than 12,000 Chinese companies to register VAT, but Dylan Davies himself is not aware of it!

7 days ago, MPs responded publicly: It is not uncommon for thousands of overseas businesses to be registered at a single address, but this is usually a serviced business office address rather than a residential address. Generally speaking, at a business address, tax agents will employ staff to screen all correspondence received from clients regarding VAT that needs to be paid.

As early as March 2021, the registration process for UK VAT was very convenient, with simple materials and quick issuance of numbers.

However, some of our domestic service providers blindly pursued low-price vicious competition and had to suppress costs at the back end to simplify necessary processes, resulting in a large number of non-compliant registrations.

After HMRC (HM Revenue and Customs) noticed this problem, it began to gradually tighten the approval process and improve the audit requirements. This has also led to a particularly slow issuance of UK tax numbers in the past one or two years. The process of step-by-step tightening has gone through the review of long-term zero-declaration tax numbers, registration investigations, platform withholding, and paper letter issuance, and more tightening policies will be issued in the future.

At present, HMRC has not found any evidence of fraud/fraudulent intent in this incident . 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.

Since investigating Mr Davies' case, HMRC has introduced new checks to ensure large numbers of businesses are not registered at residential addresses to limit the risk of "inconvenience and distress to people".

Many sellers believe that in addition to HMRC further tightening its audit, Amazon will also inevitably take action against the platform accounts of these companies.

Prior to this, Amazon had also issued a related directive requiring local accounts in the EU to upload tax data and sales data. Although the UK has withdrawn from the EU, based on the execution of new policies on the Amazon platform in the past, many sellers believe that in the near future, local accounts in the UK are also likely to start providing relevant data.

After this incident, HMRC has stated that it will tighten its review of VAT registration for overseas companies, especially on address issues.

Let's connect with ChatGPT and ask him what he thinks~

The results are as follows:

It should be noted that the above suggestions are for reference only and specific decisions should be made based on your own circumstances and professional consultation. Complying with local tax regulations and compliance requirements is an important step to protect the interests of yourself and your company.

Here, NANA recommends that each of our sellers check the validity of the UK tax number and address on this website. If the address is found to be in Cardiff, Wales, you should pay attention to it! ! ! !

Link to check the validity of UK VAT number:

https://www.tax.service.gov.uk/check-vat-number/enter-vat-details

If the original tax number has expired, you need to immediately find a compliant tax agency, such as Kuaixintong, and choose the best and most suitable tax solution for yourself.

If the tax number is still valid, but you are worried that it may be cancelled in the future due to a tax audit by the tax bureau, it is recommended to prepare another company entity to open a store and register a tax number to diversify risks and reduce losses.

As Chinese cross-border sellers, we represent China's national image and compliance ideology. In addition to ensuring financial and tax compliance under the fourth phase of the gold tax in China, we must not relax our understanding of the tax policies of the consumer's destination country and the integration of relevant background culture. Only by operating in compliance and earning the reasonable profits we deserve can our business be long-term and stable.

We, the Cross-border Business School, stand in the sellers’ perspective and put forward a request to the tax agents on their behalf: We hope that this incident can alert all compliance service providers and sincerely consider the sellers . We hope that sellers, service providers and tax authorities will work together to establish a more compliant, inclusive and secure tax environment.

NANA believes that the responsibility for tax compliance does not entirely lie with the seller. In fact, most sellers may not be aware of the non-compliant operations of the agents, thinking that the low price is a strategic pricing strategy implemented by the tax agency to seize the market after obtaining a large amount of financing. It is just a simple market behavior and no illegal operations are taken. But in fact, these low-price tax agents often take risks and conduct non-compliant operations in order to control costs. For example, some tax agents are not actually authorized by the tax authorities, or there is no fixed address in the UK as mentioned in this article. These are all illegal practices to reduce costs.

Taxation is a professional and rigorous field, and choosing a qualified compliance service provider is crucial. Sellers must strictly review the qualifications of the agent and pay attention to it! !

As we all know, it is difficult to operate overseas warehouses in the UK market without VAT. This is because of the pressure from the UK tax authorities, which require all taxpayers in the UK to register for a UK VAT tax number in accordance with regulations.