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A Jersey lawyer has sent a letter to online retailer ASOS to demand they stop charging what he believes are VAT-equivalent prices to islanders, warning of "potential legal proceedings" if not resolved.
Advocate Olaf Blakeley began his campaign at the beginning of March, after believing he was charged a VAT-equivalent price by ASOS, despite the fact its website says that exports to the Channel Islands are "zero rated."
Pictured: Advocate Olaf Blakeley
Writing in Express at the time, Advocate Blakeley said that when he complained, he was told that... "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."
He added: "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."
In response, Advocate Blakeley decided to pursue the company, and invited readers of Express to give him their own experiences of being charged VAT prices on ASOS orders earlier this month.
Pictured: ASOS tells customers they will not have to pay any VAT charges if they are exporting from the UK to the Channel Islands.
Following this request, Advocate Blakeley said he had been "inundated with emails from Channel Island residents who have been charged the equivalent of VAT by ASOS.
"Those people have expressed their disgust with ASOS and have requested I represent them in my communications with ASOS."
He then sent a letter to to the company on 22 March, warning it was a "legal letter which precedes possible legal proceedings being issued."
In this correspondence, Advocate Blakely has set out that ASOS should:
Furthermore, he also pointed out how the retailer "is dragging well behind" companies like Very, Amazon, John Lewis, Dell, Axminster Tools who he said are "completely transparent" either in deducting an amount equal to VAT, not adding additional costs equivalent to VAT, or reimbursing the amount charged to VAT.
Pictured: Advocate Blakely is requesting ASOS look into reimbursing islanders who have been charged VAT-equivalent prices.
Speaking to Express, Advocate Blakely said more than anything, he wanted to company to admit they had been charging the extra, remarking: "Don't pretend that you're deducting it and then not deduct it."
He added that if he received no response from them in the 14 day timeframe he had outlined, he would be following up with another letter, and a shorter timeframe to respond.
If after that there was still no resolution, he said that as well as potential legal action, he was also looking into the possibility of reporting it to Trading Standards, or even bringing it to the attention of the wider UK media.
Dear Sir/Madam,
ASOS.com Limited (‘ASOS’) VAT & The Channel Islands
I recently purchased an item from ASOS. Before doing so, I looked at the terms on your website in respect of purchases by residents of the Channel Islands. The information you publish on your website states:
“Exports from the UK to the Channel Islands are zero rated, so you won’t have to pay any VAT charges for your order. We’re accounting for 0% VAT, which means that your VAT has been charged at 0%.”
In reliance upon this statement I placed my order.
I subsequently noticed VAT was included in all prices on your website. Thus, the price charged to me was the VAT inclusive price. In simple terms, I paid the same price as a UK resident.
That should not be the case. ASOS is either charging VAT or is charging a higher price to Channel Island residents and failing to make that clear.
Concerned, I tried to arrange a reimbursement of the overcharged amount through your customer services department. It appeared your customer services department failed to even understand the issue despite my explaining it very clearly, on several occasions.
After numerous failed attempts to progress the matter, I informed your customer services department that should the matter not be resolved I would send a legal letter. It was not resolved and accordingly I am now notifying you of potential legal proceedings.
I wish to bring to your attention a number of matters:
(a) UK exports to the Channel Islands are zero rated for VAT
(b) ASOS acknowledges (a) above on its website
(c) ASOS creates the very clear impression residents of the Channel Islands will not be chargedVAT
(d) ASOS’s prices on its website are inclusive of VAT
(e) Residents of the Channel Islands are charged the prices which are published on the ASOSwebsite
(f) My experience of being charged an amount equal to the VAT inclusive price is not an isolated incident
(g) I have written a magazine article concerning ASOS’s statements on its website and its inconsistent treatment with its Channel Islands customers. I enclose a copy of the published article.
(h) ASOS’s failure to properly account for the invoice price difference between UK residents and Channel Island residents has been reported as news stories in Channel Island media. I enclose one such news report.
(i) Following an invitation by me, I have been inundated with emails from Channel Island residents who have been charged the equivalent of VAT by ASOS. Those people have expressed their disgust with ASOS and have requested I represent them in my communications with ASOS in resolving their having been overcharged
(j) In regard to dealing with VAT issues and Channel Island residents, ASOS is dragging well behind by comparison with other online companies.
For instance, companies such as Very, Amazon, John Lewis, Dell, Axminster Tools and many others are completely transparent and for orders being exported to the Channel Islands they either (i) deduct an amount equal to VAT from prices which are VAT inclusive; (ii) do not add additional costs equal to VAT to prices which are exclusive of VAT; or (iii) reimburse an amount equal to the amount charged to VAT.
What ASOS needs to do:
This is a legal letter which precedes possible legal proceedings being issued. The letter is intended to provide ASOS with the opportunity to engage and avoid legal proceedings.
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