There is a long-standing rule that allows the UK tax authorities (“HMRC”) to claim unpaid VAT from a UK freight forwarder, and it seems that UK freight forwarders are increasing used by HMRC as a forward defense against VAT fraud.
“Recently BIFA [the British International Freight Association, MH] has been contacted by members, which imported goods on behalf of a party outside the EU on a DDP basis. All taxes including VAT were billed back to the origin and the monies never paid, leaving the forwarder out of pocket and goods in free circulation on which VAT had not been paid, undercutting legitimate traders by 20 percent. Then the situation for the import forwarders deteriorated even further as HMRC has demanded payment in full for the unpaid VAT. As there is no other representative in the EU or UK, the forwarder cannot claim the protection of being a Direct Representative, and at best they may be jointly and severally liable as an Indirect Representative, at worst they become Self Representing, with full liability for the Customs debt.”
A couple of weeks ago, at the occasion of the UK Budget, HMRC suggested that evasion of import VAT is a major concern and that they would step up import VAT controls. Moreover, HMRC said that they would come up with an extension of rule that allows for a VAT claim at the freight forwarder – the rule would include “fulfillment houses” like Amazon and eBay.
If the UK gets serious about this (and they will), expect other EU countries to follow.
See for the entire article, with a list of recommendations, here: http://www.handyshippingguide.com/shipping-news/uk-freight-forwarders-warned-of-more-vigilance-by-hmrc-as-vat-and-other-logistics-fraud-increases_7141