For a very long time, trading on marketplaces was pretty much unregulated. In the beginning, there was not much concern about this, but since eBay and Amazon have grown exponentially in the previous past years, it became clear that a lot of the sellers are trading in certain countries without paying taxes, or even having their VAT registered.
This raised a few concerns across the globe, and especially in developed countries where these marketplaces are behind sales that are measured in billions. In one of the previous articles we mentioned how the German tax authorities decided to deal with Chinese sellers operating on Amazon Germany. Now, eBay is also joining the effort to regulate this segment of the market, and it is expected to have certain effects everywhere, including the UK.
Previously, the sellers had the option to make their VAT public or not. Now, eBay is displaying the VAT as soon as it has been entered into the seller’s profile. The implications of this are quite far-reaching.
First of all, the customers will be able to see which sellers have the UK registered VAT, which will directly influence their level of trust. Simply put – people from the UK will be more prone to buy from the registered retailers, as it will increase their level of trust.
Secondly, the new approach will make life for the HMEC much easier, as they will be able to identify registered sellers quite easily. Naturally, it may have implications to their overall approach to the entire segment of the market, as they will be able to generate lists of unregistered sellers, and in perspective – take appropriate actions, similarly to what their German colleagues did with Amazon.
Overall, this is the change that seems quite small and insignificant at the moment, but the further consequences of this new approach can be more than serious.
Submitted by Studioworx Marketing Team on 02/03/2018