MyMemory - beware if you're VAT registered!

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tfboy

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Right, I bought some new cards and high speed CF/SD reader from mymemory. Having read the other thread on here concerning them, I went ahead :)

As their T&Cs state:
The price of all goods and services advertised are inclusive of any applicable UK taxes including VAT.
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My business is now VAT registered, so I went ahead on the understanding I could claim the VAT back.

Turns out this is not the case as VAT isn't applicable to my purchases apparently!

I had a lengthy online chat with one of their CS guys who I think isn't quite right in what he's saying...

Me:
Hi. Having placed an order which has now been dispatched, where can I obtain an invoice from? The order confirmation email says that I should be able to obtain an invoice.

CS:
Hi Xavier,
there will be an invoice attached to the order once you received it, alternatively you can use the 'track order' option on our website for a copy of your invoice
please note that we are VAT registered and there will be no VAT added to your order, if this is the purpose of the invoice you require

Me:
yes, I was after a VAT receipt :)
the online Track Order doesn't seem to provide this just a summary of the order, date, delivery details and items. No mention of VAT.

CS:
Yes thats correct, as we are not VAT registered therefore there will be no VAT invoice as no VAT will be added to your product/order/delivery

Me:
that's strange. Your T&Cs say goods include applicable UK taxes including VAT...so your T&Cs aren't correct?

CS:
if the product is 'applicable' for VAT, this only accounts for a certain selection of our products, your order did not fall under the fresh hold for VAT,

Me:
the threshold for importing goods into the UK is £15 including any delivery. Above that, VAT should be charged.

CS:
do you have an order number please? i will double check your order

Me:
Sure, it's xxxxx

CS:
i can confirm there is no VAT added to your order, though there is a small service charge that is agreed on by you purchasing the order, if you are unhappy with this we can accept the order back for a full refund , apologies for the inconvenience

Me:
I'm not aware of any "small service charge" - this isn't explicitly mentioned anywhere in the order or T&Cs. Furthermore, it's disappointing to learn that despite your T&Cs stating VAT is included, you're now saying it is not. As a VAT-registered business, this effectively makes you 20% more expensive.

CS:
sorry for the confusion Xavier, our T&Cs states any 'applicable' Tax and VAT will be added, the items that you have ordered did not fall into this category therefore you were not charged VAT, you made the purchase at the agreed price at the end of the checkout, this price included the service charge
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Anyone else dealt with them? Maybe the chap is just wrong and the delivery will include a printed paper receipt with the VAT details... I understand they're based in Jersey so fall in that strange loophole so I'm not holding my breath...

As for the items not being applicable to VAT, I always believed electronic storage items and accessories to be applicable - I have always paid VAT for them everywhere else!
 
fresh hold!

They should be able to provide a VAT invoice for goods imported over 15GBP as you mention.
 
Historically the CI could avoid VAT on UK sales, which is why MyMemory and 7DayShop are both based there.

I'll take a punt and guess that they are doing exactly the same as Panamoz and Digital Rev; ie telling everyone that they cover VAT but only paying it when caught.
 
basegreen said:
fresh hold!.
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LOL I know. I actually needed 5 seconds to understand what he meant!

DemiLion said:
Historically the CI could avoid VAT on UK sales, which is why MyMemory and 7DayShop are both based there.
I'll take a punt and guess that they are doing exactly the same as Panamoz and Digital Rev; ie telling everyone that they cover VAT but only paying it when caught.
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Quite possibly. What annoys me is their T&Cs that explicitly state any applicable charges including VAT are included. So when you combine that with the fact there apparently is no VAT, then it's kind of false advertising in a way.
It appears (maybe if they're based in the CI) that they're NOT a registered limited company - their name does not come up on Companies House. I would find it hard to believe they're VAT exempt as a normal UK company as the must have a turnover of several £100k pa.
ecoleman said:
They wouldn't sell anything that is VAT except. Send your transcript to HMRC.
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Don't think HMRC could be bothered for small fry, and probably not their jurisdiction or not much they could be said to be doing wrong if based in the CI.

The bottom line is I bought from them believing I would be getting the VAT back. As that's not the case, I'd have been better off buying elsewhere I could get similar products for less than an extra 20% meaning they'd be better value overall.
 
My understanding was that for taxation, Jersey is not part of the UK, and outside the EU. Goods being imported to the UK may be subject to UK duty and VAT upon delivery, providing the value of equipment is over the threshold for attracting duty and VAT, and usually the delivery firm will pay on your behalf, and then reclaim from you upon delivery.

However, i'm not an accountant. In my day job I have to occasionally send goods to Jersey which are not taxable, and services, if performed here, which usually are.
 
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Err if they are not VAT registered they will absorb Vat on their purchases as a cost and will not charge VAT on their Sales, so no you wouldn't get a VAT invoice as they haven't charged VAT
 
tfboy said:
It appears (maybe if they're based in the CI) that they're NOT a registered limited company - their name does not come up on Companies House. I would find it hard to believe they're VAT exempt as a normal UK company as the must have a turnover of several £100k pa.
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Why would a CI company be registered in England? They aren't even part of the EU. let alone the UK.
 
DemiLion said:
Why would a CI company be registered in England? They aren't even part of the EU. let alone the UK.
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They wouldn't. What I hadn't realised is that they were Jersey-based before I placed the order. They do publish their address on the contact page. I didn't think to check that - I just checked their T&Cs where they state tax and VAT is included which, as they are CI-based, is a "naughty" mistake in my opinion as the customer incorrectly assumes they are a UK-based, VAT-registered company.
Overexposed said:
This might help! http://www.brighton-accountants.com/blog/vat-jersey/
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It does to a certain extent, although it appears to cover selling to the CI and not buying from the CI.
 
tfboy said:
They wouldn't. What I hadn't realised is that they were Jersey-based before I placed the order. They do publish their address on the contact page. I didn't think to check that - I just checked their T&Cs where they state tax and VAT is included which, as they are CI-based, is a "naughty" mistake in my opinion as the customer incorrectly assumes they are a UK-based, VAT-registered company.

It does to a certain extent, although it appears to cover selling to the CI and not buying from the CI.
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As the Islands do not have their own VAT, a UK business should not be charged Channel Islands VAT on any goods, but may be charged the standard rate of UK VAT on importing goods into the UK. This can be reclaimed on the regular UK VAT return, subject to the normal rules about reclaiming input VAT.

You would be charged UK VAT on import which you can claim back.
 
bought several times from them and never seen any invoice as they based in Jersey... but again im not VAT registered so it didn't make me any difference to me. i found they prices really good
 
Overexposed said:
As the Islands do not have their own VAT, a UK business should not be charged Channel Islands VAT on any goods, but may be charged the standard rate of UK VAT on importing goods into the UK. This can be reclaimed on the regular UK VAT return, subject to the normal rules about reclaiming input VAT.

You would be charged UK VAT on import which you can claim back.
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Yes, I know that's how it works.
As it turns out, I didn't get charged VAT as they sent them individually, maybe to reduce chances, although all items were over £15 each.

asaspasas6 said:
bought several times from them and never seen any invoice as they based in Jersey... but again im not VAT registered so it didn't make me any difference to me. i found they prices really good
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Yeah, but having searched a bit, I can actually get them cheaper from Amazon (proper Amazon, not a reseller) and they provide a VAT invoice so I'm happy. I've phoned MyMemory and eventually spoke to a lady who explained that apparently, they sometimes ship from elsewhere (presumably the EU) where VAT would be charged, but as my order was shipped from the CI, that's why it wasn't applied... Still, they have a freepost returns address so it's now all packaged up with an RMA number and I'll drop it off at the post office this afternoon.
 
It does say "any applicable taxes". These grey importers often use that phrase.

You would need to know in advance if VAT was applicable in this case. I agree that its annoying and misleading but I fear they have you by the S & C's.

I would return the goods and ask for a refund. If it was a small order, I'd put it down to experience.
 
If you're claiming the VAT back its a business expense yes? Then if you have bought an item with No VAT element you claim back the gross cost in your accounts. If an item was say £100 inc VAT from one supplier and £100 no VAT from the other in real terms there's little in it - especially if you're a higher rate tax payer.
 
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