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As a regular glance at our Warehouse
Property News pages on
veals,
the increasing need for warehouse
space provision is not slowing down.
That’s good news for the industry: but
expansion also increases the pressure
on warehouse providers to stay up to
date with the latest tax and regulatory
rules.
In the run up to Christmas in the UK,
HMRC raided warehouses which they
believed contained goods supplied
by overseas online traders that were
being sold without UK VAT. Items
worth hundreds of thousands of
pounds were seized. The warehouse
keepers might not even have been
aware of the problem; however recent
developments mean that may not stop
them being held accountable for it.
It’s not a UK-only issue. A vendor
of goods in the EU has two main
transactions to consider when thinking
about VAT. The first is on its purchase,
when VAT will either be charged by
a supplier, need to be accounted for
on an acquisition from another EU
Member State or incurred on import
into the EU (if the business is not
manufacturing the goods themselves).
The second will be on its onward sale
to either the final consumer or another
party in the supply chain.
The VAT that needs to be accounted
for on these transactions has
always been the responsibility
of that business. However, the
spectre of “responsibilisation” is
beginning to creep across the EU.
Responsibilisation involves the need
to account for VAT being spread
across more parties than just the one
making the supply. It kicks in where
the taxpayer with a duty to pay the
tax defaults, disappears or has an
intention to defraud the State.
The UK now seems to be
following the EU trend towards
‘responsibilisation’ by looking at
whether third parties can be held liable
for the VAT failings of their clients.
Taxing issues
Logistics providers and warehouse
keepers are obvious targets, as they
facilitate large volumes of cross-border
trade, and could be considered to
have an obligation to be aware of the
tax status of their customers.
Questions have been asked in the
House of Lords about the issue (with
demands made that Amazon become
liable for the unpaid VAT of thousands
of customers); and the outgoing head
of HMRC has been pilloried on the
problem. The crux of the matter is
that the actions of small, often non-
EU (mainly Chinese) e-commerce
sellers is both cheating HMRC out
of tax, and putting UK competitors
at a major disadvantage (because
the non-EU sellers are starting with
a 20% better margin). But it’s not just
non-EU businesses which are causing
concern.
In the very recent past the German tax
authority has asked Amazon for details
of its FBA and e-commerce clients
whilst the Netherlands has already
attempted to sue a warehouse keeper
With the growth of e-commerce via non-EU sellers, the
question of responsibility for VAT is becoming a potential
issue for the warehouse industry.
for millions of euros of VAT left unpaid
by a client. This clampdown indicates
a possible wider way forward and, it
should be noted, involves the use of
policies which are a natural fit with The
Union Customs Code which comes
into effect 1 May 2016 (which includes
a provision for warehouse owners to
provide guarantees on the import duty
payable by business).
While all of these changes might
sound like the imposition of yet more
administrative burdens on warehouse
operators, the reality is that with some
careful forward planning it can be
managed in an organised and efficient
manner. Given the consequences of
not doing anything, it means a small
investment now will result in a more
secure and reduced risk business
going forward. As a result, providers
in this sector would be wise to put in
place a cross-border VAT compliance
procedure for their clients sooner
rather than later.
26
Logistics Business Magazine | February 2016
RESPONSIBILISATION