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Opinion

A taxing problem

A taxing problem

Monday 01 March 2021

A taxing problem

Monday 01 March 2021


We’ve been here before: companies in the UK charging VAT on goods sent to Jersey and either wilfully refusing to deduct it, or simply not understanding the issue regarding Jersey’s zero-rated VAT status. This time my attention is focused on clothing giant ASOS.

Either as a result of pressure from the island’s media, or because of an educational improvement, companies such as Amazon and Sky now do not charge Islanders VAT.

I have to say, I get a warm fuzzy feeling – no - more a quelling/release of anxiety, when I ‘proceed to checkout’ and find that my online dealer has got its act together, and VAT is chopped away.  

Sure, there are companies where VAT is charged but later refunded (John Lewis) but the goal is achieved all the same. Even relatively small companies, or ones which you may have thought would not be geared-up for the niceties of the Channel Island’s tax situation know the VAT rules.

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Pictured: Advocate Olaf Blakeley wants to hear from islanders who have been charged VAT by ASOS.

The fact that these companies do deduct VAT makes it all the more frustrating that a company such as ASOS does not.  

Before I develop my rant, I should say this: legally a company can charge what it likes for a product (with the exception of goods or services for which specific legislation may apply).

Furthermore, it can charge people in the UK one price, and can apply a service, or admin, charge to people in Jersey.  I have no problem with that.  I am a lawyer, and if a company’s terms are ‘a, b and c’ then I either contract with them or I don’t.  

If they tell me as a Jersey resident they will charge me an extra 20% I’ll probably say, “No: that is your policy but you won’t be charging me because I won’t be contracting with you.”  I am happy to either accept, or decline, based on the terms.  

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Pictured: "If they tell me as a Jersey resident they will charge me an extra 20% I’ll probably say, 'No: that is your policy but you won’t be charging me because I won’t be contracting with you.'"

What I will not be happy about is if I am misled because a company mis-states a factual position.  I will be even less happy if it tries to ‘big itself up’ by declaring a certain state of affairs, which gives the impression of fair dealing - from which it subsequently reneges.

Such was my experience with ASOS. I had never done any business with ASOS, but I had no real choice. Shops in Jersey were shut, and what I required, I could not find from any other online merchant.

I looked at ASOS’s terms: there was a specific section in the ‘Help’ area titled “I live in the Channel Islands – will I have to pay VAT?” The section refers to GST payable locally (incorrect and outdated information) but, in respect of VAT it says: 

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But I was charged VAT. And so, then started the flurry of emails back and forth to customer services. It was draining. There is no telephone number to use (that I could find) so it was just the written word.

At first, it had slight entertainment value, but that rapidly wore off. At one point they were insisting no VAT was charged. I pointed out the prices on their website included VAT (clearly written in their terms) and I paid that price.

It appeared what their argument was, is they accounted 0% for VAT on the order, giving me the impression what they were saying was they were charging 20% more but just pocketing that and not accounting for it to HMRC. Legally, they would be right.

If such was the shenanigans, you are not being charged VAT you are just being charged the same price as if you were paying VAT. ASOS just keeps it all because it is not legally required to account to HMRC. 

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Pictured: Advocate Blakeley says he repeatedly exclaimed loudly over ASOS's "mind-boggling emails".

The mind-boggling emails I got back from the company started to cause me to exclaim “WHAT!!!” out loud (very) each time one landed in my inbox. My office manager who sits quite some distance away would make herself scarce knowing full well that was a sign another ASOS email had arrived, and very soon I would be out of my office going on and on and on about what I saw as ASOS’s incompetence. Well, what can I say? It mattered to me.

Anyway, long story, short: I’ve decided to pursue ASOS because I just consider the attitude and the breach of its terms to be unacceptable (I blame lockdown for my rapidly vanishing patience).  

If you have been charged VAT on orders from ASOS and you ordered in the last 3 years, I’d like to hear from you. I need to gauge the extent of the problem before I begin the arduous task of extracting the overcharged amounts from ASOS, including having them agree to refund others’ historic amounts.

They could have avoided this very expensive and complicated task, if they had just deducted 20% on my order. But, the gauntlet has fallen.

So, to get contact, please email and just state your name and address. Don’t provide any other details.

Watch this space.

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