VAT Invoicing – The Bad, The Badder, The Baddest

Posted July 27th, 2014 by Christopher in News | Leave a comment

VAT. The source of so much enjoyment, amusement and, evidently, blog posts.

Continuing from my previously, much less educated view on VAT fraud, evasion, and general ignorance by major UK companies (see The Trouble With Games Retail and Are major retailers scamming £Ms from HMRC?, here’s some more legal stuff, and general naming and shaming covering the issuing of correct VAT receipts. Cos it’s not like I have anything better to do on Sundays…

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Firstly, the law.

It is an obligation under uk law (The Value Added Tax Regulations 1995, Part II, Regulation 13) for VAT registered sellers to supply a VAT invoice when request to do so by another VAT registered individual. Failure to do so is an offence of said act, though the exact punishment I’m yet to find out (general VAT fraud is a criminal offence punishable by up to 7 years in jail – see http://www.legislation.gov.uk/ukpga/1994/23/section/72 ).

VAT invoices should be issued within a specific time period relevant to the supply of the goods/service – see http://www.hmrc.gov.uk/manuals/vattosmanual/vattos5215.htm .

VAT invoices may contain varying amounts of data depending on the specific type of VAT invoice supplied/allowable – see http://www.hmrc.gov.uk/vat/managing/charging/vat-invoices.htm#6 .

And this is all required to, amongst other things, allow a VAT registered individual to correctly file VAT returns and other related documentation. Failure to do so is also illegal (another 7 years in jail await) and covered by the Finance Act 2007, schedule 24 – http://www.legislation.gov.uk/ukpga/2007/11/schedule/24 . Specifically, it’s an offence to have an “inaccuracy in a document as a result of third party providing incorrect (or withholding) information” – see http://www.hmrc.gov.uk/manuals/bimmanual/bim31610.htm . So if you mess your own return up because someone else didn’t give you the right receipt, too bad.

Fortunately, HMRC see receipt witholding as such a “systematic and widespread attack on the VAT system”, they introduced guidance, backed by law ( Section 24(6)(a) of the Value Added Tax Regulations 1994 ) to combat this. This guidance is called “Input tax deduction without a valid VAT invoice – Statement of Practice” and is available at http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_PROD1_027309 . In summary though, if you don’t have a VAT invoice, one should basically figure it out your damn self. But keep enough evidence to show how, and why, you did this. Which is nice of them, considering if you do get it wrong (or don’t do it at all, effectively leading to getting it wrong), you’re in breach of FA 2007, and liable to 7 years prison time.

I’m not a lawyer, or an accountant, so I may be wrong in some places. But you get the idea. It’s illegal to refuse a VAT receipt, highly problematic (pottentially leading to a criminal offence) not to have one, and a whole heap of fun to resolve when you don’t.

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So, with that in mind, let’s see how many UK VAT registered individuals follow the receipting law. Or, any VAT laws at all for that matter. Did any of the UK’s biggest retail companies manage to get it right? Did they heck…

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Curveball Leisure Limited, trading as The Game Collection
This is an old one, but I figure I’ll start from the beginning. But it does mean this has likely changed / got better since I last used them (and I don’t want to piss them off too much). But a few years back, whilst they did issue otherwise valid VAT receipts (if not quite the actual stock they’re for), they did manage to provide a highly inaccurate VAT calculation – ignoring any discounts given on orders and merely providing a VAT figure for the pre-adjustment price. In other words, they’d told you you’d been charged more VAT than you actually had been. Let’s hope their actual VAT returns were more accurate. And their customer’s VAT Returns were too. Else you’re both liable for jail.

Game Digital plc (formerly The Game Group plc)
Who like to leave it up to their untrained store managers to provide hand-written VAT invoices. That’s if they don’t hand you a Retail Export Scheme invoice (plus, hopefully, a VAT 407 form). Luckily Game generally “forget” to provide most stores with these, so it’s back to basics, with the manager dividing your total by 6. Unless of course the VAT rate just changed, which is unfortunately, considering at least one GAME store manager when questioned was unaware of an increase a couple of weeks before it happened. Anyway, even if they do get the correct VAT rate, they’re no doubt completely unaware of the differing VAT schemes in play, meaning VAT is not necessarily charged on all items, at the same rate. Or, even, what details should actually be present on your VAT receipt. Long story short, even your VAT receipt won’t, technically, be a VAT receipt.

Amazon EU S.a.r.L.
Actually, these guys ain’t bad. Whilst they don’t issue a physical VAT receipt, or have any form of VAT receipt available through their website, and, whilst they do provide a VAT figure on order receipts, this is most likely incorrect (…pending confirmation…) – despite all of that, they do actually have an entire department purely for issuing VAT invoices. Just e-mail your Amazon order number an VAT invoice request over to request-invoice@amazon.co.uk and they’ll do the rest. Hopefully. I’m still waiting for mine… UPDATE: Wow. Close to correct. Not sure about the 0% VAT… That’s Amazon for you though, always finding a way around the VAT laws :) .

Entertainment Magpie Limited
Trading as the nationally recognised Music Magpie, Zoverstocks, That’s Entertainment and Estocks. A “Sunday Times Tech Track 100″ company. A national award winner. Hands down the largest used-media retailer in the UK. The accolades could go on and on. Luckily, their VAT invoice refusal didn’t, and was short and sweet:
“all invoices and notifications are provided by (insert 3rd party marketplace). We do not include any paperwork in our parcels, as all the information you require should be in the confirmation emails sent by (insert 3rd party marketplace)”. – Customer Services, zOverstocks
Unfortunately in this case, the 3rd party marketplace was Amazon. Who, like every other marketplace, don’t issue VAT invoices (or, in Amazon’s case, any invoice at all) on behalf of 3rd Party marketplace sellers.

Eaglemoss Publications Ltd
One of the world’s largest publishers of magazine collections. A €230 million global turnover. And a UK VAT registered company. Surprising then that publishing a VAT receipt – or, indeed, any receipt at all – appears to go beyond their capabilities. Here’s a quote from one of their outsourced, contracted CS agents (presumably manager, this was the second refusal I was given, and much more formal) relating to a magazine subscription / ongoing purchase order:
“Since subscriptions are almost universally to individuals rather than companies, we don’t have a facility to issue a separate VAT receipt.” – Customer Experience Department, Data Base Factory Ltd.
Apparently I’m just too individual for them. Coming from a comic book publisher, that boosts the fuck out of my street cred, at least.

Forbidden Planet Limited
“The World’s #1 for Comics, Merchandise & More!”. But, so far, the World’s Worst for following VAT regulations. If you were to simply go off their retail website – https://forbiddenplanet.com/ – you’d be fogiven for believing they weren’t even VAT registered at all. Breaching more VAT regulations than I can count, not only do they fail to provide VAT invoices or details of VAT charged, they also make no mention – anywhere at all (inc. all paper or electronic documentation or correspondance) – of their VAT registration number or VAT registered status. In fact, the only place the word VAT is even mentioned on their website is in their terms at https://forbiddenplanet.com/pages/terms/ , which merely suggests that VAT is included “where appropriate”. Which means nothing, given the former lack of details suggest it would never be appropriate at all.
But alas, one of the world’s largest comic and media merchandise retailer is indeed VAT registered. Or, at least, their parent company is – Titan Entertainment Group Limited GB991291493 . So the following quote rests on their shoulders then:
Unfortunately we are not able to provide a VAT receipt” – Forbiddenplanet.com Customer Service Team.

Next time, the smaller guys get a grilling. And some very interesting Import arangements…

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