VAT not being advertised

spudbynight · 26 Oct 2011 at 13:59

I recently took out a magazine sub with Zinio - the online emagazine firm.

It was advertised as £23.33 and I paid with Paypal. I didn't really check the Paypal amount (I know!) but noticed afterwards I had been charged £28 not £23.33.

I dropped them an email and this is the response I got :

Hello,

Thank you for contacting Zinio Customer Support.

Please note that VAT was applied at the time you checked out in Paypal.

For Zinio purchases, VAT is calculated based on the country provided in your billing address. VAT payment is transferred directly to the billing country. Zinio does not provide exemptions, as we do not have a system in place to validate VAT exemption numbers. VAT charges are displayed right before you 'Place your order.' (*Note: We are unable to display prices tax inclusive as our system can only add applicable taxes once your billing information has been entered during checkout)

Refunds must be applied for directly through the tax authority of the country that charged the VAT (the country provided on the billing information). For international customers seeking a VAT refund, Zinio's EU VAT Registration number is EU528000069.

If I can be of further assistance, please let me know! I would be happy to assist you further.

Kind Regards,

Zinio Customer Support

Now I don't have a problem with the amount charged - if VAT has to be paid then it has to be paid. What I have an issue with is them advertising an ex VAT price. I was under the impression this was illegal unless you were advertising a product or service for business customers?

Note:

I posted this in Tablets and Mobiles by accident. Could a kind don close that thread?

http://forums.overclockers.co.uk/showthread.php?t=18333928

shine · 26 Oct 2011 at 14:01

Prices with VAT must be displayed IF the target customer is the general public only (e.g. supermarkets). However, if the advert is for both then you do not need to display the price with VAT:

http://www.hmrc.gov.uk/vat/sectors/consumers/basics.htm

demonix · 26 Oct 2011 at 14:29

They shouldn't have charged any VAT as magazines are exempt from VAT
http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm
Click the link for printing, postage, publications, books, magazines and newspapers and scroll down to the publications part.

Bennie-Mac · 26 Oct 2011 at 14:30

demonix said:
They shouldn't have charged any VAT as magazines are exempt from VAT
http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm
Click the link for printing, postage, publications, books, magazines and newspapers and scroll down to the publications part.

Digital magazines are though, same with ebooks.

spudbynight · 26 Oct 2011 at 15:38

shine said:
Prices with VAT must be displayed IF the target customer is the general public only (e.g. supermarkets). However, if the advert is for both then you do not need to display the price with VAT:

http://www.hmrc.gov.uk/vat/sectors/consumers/basics.htm

It was PC Format magazine - not really aimed at the business market!

shine · 26 Oct 2011 at 16:02

spudbynight said:
It was PC Format magazine - not really aimed at the business market!

There is a note below the price clearly stating that VAT is not included - "Price subject to applicable taxes (VAT) "

http://gb.zinio.com/browse/publicat...026&productId=500622616&categoryId=cat1960060

csmager · 26 Oct 2011 at 16:11

They're American, they sell Worldwide. I wouldn't think they could be expected to guess where your billing address is and what taxes should apply before you purchase.

spudbynight · 26 Oct 2011 at 16:34

csmager said:
They're American, they sell Worldwide. I wouldn't think they could be expected to guess where your billing address is and what taxes should apply before you purchase.

Well legally they are expected to if they want to charge UK VAT.

They are not allowed to charge UK VAT unless they advertise the price as VAT inclusive.

You only see the price of £23.33 if you select UK as your location. If you select another country you see a different price.

csmager · 26 Oct 2011 at 16:36

spudbynight said:
Well legally they are expected to if they want to charge UK VAT.

They are not allowed to charge UK VAT unless they advertise the price as VAT inclusive.

If they "want" to charge UK VAT? They don't get a choice!

spudbynight · 26 Oct 2011 at 16:39

csmager said:
If they "want" to charge UK VAT? They don't get a choice!

And they don't get a choice about displaying the price including VAT

csmager · 26 Oct 2011 at 16:41

Why not? They're based in America. It's not a UK website. They charge UK VAT on the basis they're supplying TO the UK - unlike a UK company, which charges UK VAT on the basis they're supplying FROM the UK.

They don't know VAT is chargeable and at what rate until you order and tell them where they're supplying to. Hence they show a message saying additional taxes may apply.

Neodite · 26 Oct 2011 at 16:43

Digital Subscription
£37.49 / 13 Issues
Save 31% off the newsstand price
Price subject to applicable taxes (VAT)

You didn't need to check it on paypal. It says it in black and white

Dave M · 26 Oct 2011 at 16:47

TBH if they advertise it in GBP there should be a reasonable assumption that it will be sold in the UK and that VAT would be applied (especially as they don't allow a VAT free supply).

In this cirumstance I'd advertise with UK VAT and show a confirmation page after they've logged in with paypal to show the exact price based on their paypal address.

I think the ASA would be your port of call if you wanted to refer it on.

spudbynight · 26 Oct 2011 at 16:48

csmager said:
Why not? They're based in America. It's not a UK website. They charge UK VAT on the basis they're supplying TO the UK - unlike a UK company, which charges UK VAT on the basis they're supplying FROM the UK.

They don't know VAT is chargeable and at what rate until you order and tell them where they're supplying to. Hence they show a message saying additional taxes may apply.

In order to charge UK VAT you have to list the price as VAT inclusive. That is the law. It doesn't matter whether they are in the UK or Timbuktu

Dave M · 26 Oct 2011 at 16:48

csmager said:
They charge UK VAT on the basis they're supplying TO the UK - unlike a UK company, which charges UK VAT on the basis they're supplying FROM the UK.

A UK company doesn't, they charge based on the country they are supplying too.

TommyV · 26 Oct 2011 at 16:48

It's £5.

spudbynight · 26 Oct 2011 at 16:49

Neodite said:
You didn't need to check it on paypal. It says it in black and white

But that price you quoted is misleading and inaccurate. You have to pay VAT which makes it more expensive compared to the newsstand price.

spudbynight · 26 Oct 2011 at 16:50

TommyV said:
It's £5.

I don't have an issue with paying the VAT - as I said earlier it is the misleading price and the breach of UK tax law that I have an issue with.

They also don't supply any sort of VAT invoice which again is illegal. Their own website quotes £23.33 and only when you go to Paypal does it jump to £28. There is no VAT breakdown or VAT number mentioned during the process.

Destination · 26 Oct 2011 at 16:59

Bennie-Mac said:
Digital magazines are though, same with ebooks.

How absurd, so an ebbok will suffer vat despite having no physical footprint, and could well then cost more than physical media.
How utterly backward of our tax system.
Throw backs from a predigital age.
Civil servants on the ball as usual, claiming expenses and doing no work

shine · 26 Oct 2011 at 17:02

spudbynight said:
I don't have an issue with paying the VAT - as I said earlier it is the misleading price and the breach of UK tax law that I have an issue with.

They also don't supply any sort of VAT invoice which again is illegal. Their own website quotes £23.33 and only when you go to Paypal does it jump to £28. There is no VAT breakdown or VAT number mentioned during the process.

Yet, when you purchased the lack of lack of these things did not ring any alarm bells at that point? :confused: