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A long time ago I said I would publish how FW was in fact breaking EU/ UK law ref VAT to overseas customers and how they actually owe a refund to a lot of people. Finally got round to it.

On many UK websites there is a habit where the price you charge is applicable to the whole world even though the UK price actually includes VAT (currently at 20%). Let me be clear, I full believe that in many instances that this is legal providing there is no mention in the price that VAT is included. Where there is no mention that the price includes VAT all the accounting for VAT on UK sales is behind the scenes. UK/ EU sales are issued with a VAT invoice that splits out the final price between VAT and product cost (VAT goes to UK government). Non-EU sales just get the same final price and all of it goes to FW.

This is exactly how ForgeWorld treats it and I exchanged a few emails with the head of ForgeWorld who confirmed this.

However, following a thread argument along time ago with Orlanth, I decided to follow up on something an lo and behold I believe that ForgeWorld have made a fundamental mistake and I believe they are totally open to having to give refunds to all people outside of the EU. I also believe they are going to be in trouble with the VAT man.

So let’s walk through it.

Unlike many websites, they have made the mistake of including a wonderfully laid out set of terms of sale that totally invalidates their position on VAT. Take a look at 3.3 where it states “we recommend that you refer to the tax addendum to these terms and conditions on the Games Workshop Web Site” and they helpfully provide a link to that page.

http://www.dakkadakka.com/gallery/514678-FW%20Trade%20Terms%20VAT.htm]

So let’s take a look at the tax terms then shall we.


The one ForgeWorld is probably relying on to support their VAT position is that US and Canadian Web Stores section: “All prices are quoted exclusive of any taxes”. This stacks with ROW Shipments where it says “No taxes are raised on shipments to the rest of the world”. Seems cut and dried right? All prices per GW are charged ex-VAT for non-European customers.
There is a huge BUT!! Games-Workshop.com has multiple websites that are obviously hosted in different areas or indicate that they are from different zones – hence the reason why in the tax terms there are different policies.

http://www.dakkadakka.com/gallery/514679-GW%20VAT%20Terms.html

However, because ForgeWorld only has one website and that is a UK website (it has a .co.uk end and I get billed foreign transaction fees using it from the US) the section that has to apply is actually the “European and Australian Web Stores”. It applies because ForgeWorld.co.uk is a European web store – unlike GamesWorkshop.com which has a web store in several countries. Therefore what applies is “all prices are quoted inclusive of VAT” where it goes onto state that this tax will be deducted if going outside the country though in this case I think it means outside the EU.

I believe therefore there are two possibilities:
1) FW is illegally holding on to VAT it has incorrectly charged to sales outside of Europe and are probably under risk on sanction from the VAT man.
2) People outside of Europe are entitled to a refund on the VAT they have been incorrectly charged.

I am writing to the VAT man to clarify this position and to FW to make them aware of this - but feel free to start hassling GW and FW.

Ugly Green Trog wrote:
Surely as the FW website is a .co.uk any local tax laws apply as HM customs and revenue expect VAT to be charged therefore it is to HM customs and revenue that you should direct your complaint. I know in the uk that if you claim your VAT back from business purchases you do it from HMRC not the company you purchase from. Just like if you holiday in the UK you can't claim VAT back at the cash register just because you don't live here. I have heard of VAT being claimed on large purchases by tourists when they leave. Your FW receipt should display your VAT amount so you should visit http://www.hmrc.gov.uk/vat/ for more info.

It used to be HM Customs and Excise but since my days as a VAT accountant I believe it has merged with another body - hence why I used the term VAT man.

VAT as a tourist is claimed as you leave the country. There is a little form filled out at the cash register.

If I purchase from FW in the US it doesn't include VAT - the price charged is meant to be VAT exclusive. That is why their terms of trade on how they charge prices is extremely important. Currently, per their badly worded terms of trade, FW prices listed on their website include VAT which is therefore incorrectly charged. It isn't a case of a refund of VAT -VAT should never have been charged in the first place.

 Peregrine wrote:
This has come up before and the answer was that you get charged VAT on orders where it has to be collected and you get charged a higher price on orders where it isn't. You can't claim a refund because no VAT was ever charged, you just paid a higher price for your models.

As for why: simplicity in pricing (so they don't need multiple websites with different pricing methods) and high shipping costs. Currently international shipping is much cheaper than it should be because the "extra" charge is going straight into shipping. If you did succeed in getting them to lower the prices on no-VAT purchases all you'd accomplish is getting shipping costs raised from 15% to 30% to compensate.

Two things:
1) You are right if VAT was never charged. You obviously haven't read my post because FW terms of trade state that prices on their website include VAT. It is just buried. Please reread what I wrote. Although my flag says US I am actually English and 12+ yrs ago I used to do VAT returns for a large multinational company. I do have some idea what I am talking about.
2) If they raised shipping charges it would at least be transparent instead of a hidden charge to all of us across the water.


Automatically Appended Next Post:

Mythal wrote:

 Fafnir wrote:
Looking at the receipt for a purchase I made a few years ago, it very clearly says that The price includes VAT. Would this make me entitled to a refund?

Potentially, yes - but you would apply for that refund from Her Majesty's Revenue and Customs, not Forgeworld itself. If it turned out that the VAT you are claiming back was never paid to HMRC, it would be the Revenue's job to pursue Forgeworld.

If memory serves correctly it would actually be FW. VAT was incorrectly charged and therefore FW needs to back it out of its books and they would then (if they passed it on the gov) claim it back on their next claim period. Claiming it back from the government is a service provided to tourists and must be done as they leave the country.

 Peregrine wrote:

 fullheadofhair wrote:
1) You are right if VAT was never charged. You obviously haven't read my post because FW terms of trade state that prices on their website include VAT. It is just buried. Please reread what I wrote.

I read what you wrote, and I'm saying that you're wrong. This has come up before and the answer is that FW does not charge VAT on orders where it shouldn't be charged, you just pay a higher price that is equivalent to what VAT-paying customers pay. Whether or not their terms of trade are poorly written FW is not collecting VAT on any orders that it shouldn't be collected on.

Three points:
1) I was the main person arguing that FW wasn't including VAT - trouble was I assumed someone in FW/ GW knew how to write terms of trade. It was in relation to argument I was having with Orlanth that made me read their terms of trade.
2) the terms of trade are VERY clear and are part of a legally binding contract of sale. They are the first port of call when there is a dispute. The terms of trade are very clear - they have been used in a manner probably not in the way intended.
3) The terms of trade for all GW UK websites (of which FW is one) specific state that the price is inclusive of VAT.

Therefore, for all intents and purposes, despite what FW maybe trying to do they have managed to include VAT in their prices in their sales to the rest of the world.

 Peregrine wrote:

 ObliviousBlueCaboose wrote:
Even if it is a standard template, to prevent any legal matters or complaints that would arise wouldn't it be prudent to have included the words "if any?"

It would make sense, but obviously they don't do it. But when this subject has come up before, with people thinking they can get a nice VAT refund check, the answer has been that no VAT is charged unless it has to be.

 Cruentus wrote:
How is this the case when we're all going to the same website, and paying in the same £?

Let's give an example. An item has a price of £100 listed.

A UK resident pays £83 for the item and £17 in VAT.

A US resident pays £100 for the item and £0 in VAT.

The total price charged is the same for convenience, you just pay more for the item itself if you aren't paying VAT (which subsidizes the cheap shipping).

It never asks me where I'm from until I fill out the shipping info.

But it still asks you, and at that point it determines whether you pay £83 + £17 or £100.

And it says on FWs site that all prices include VAT.

All prices include VAT if any.

i'm charged a conversion fee from £ to USD

Not by FW. Any convesion fees are charged by your bank or credit card company.

You are ignoring the impact of the legally binding terms of trade that specifically say all uk website prices are inclusive of VAT. You math maybe correct but you are missing the fundamental point.

3.3 Please note that your purchase may be subject to certain sales taxes depending upon such factors as where in the world you order from or where the order is to be shipped to. Furthermore, the prices stated may or may not include a calculation of such sales tax. For more detailed information, we recommend that you refer to the tax addendum to these terms and conditions on the Games Workshop Web Site.

European and Australian Web Stores
All prices are quoted inclusive of the VAT or GST that applies in the country of the web store (e.g. the French web store prices include French TVA). If the goods are dispatched to an alternative destination outside the country of the web store, then this tax will be deducted prior to applying the tax rate appropriate to the country of destination of the order.


FW is a European website. Explain to me why terms of trade the FW says they are trading by are not applicable? As it says above, please refer tp the tax addendum.

The tax addendum specifically states it is inclusive.

 Peregrine wrote:

 fullheadofhair wrote:
If the goods are dispatched to an alternative destination outside the country of the web store, then this tax will be deducted prior to applying the tax rate appropriate to the country of destination of the order.

No tax deducted, no tax was charged.

But seriously, if you think you know better than GW's lawyers and accountants then feel free to challenge the exact wording and demand your VAT refund.

As a ex-VAT accountant yes I will be writing to both FW and the VAT man. As to knowing better that GW lawyers and accountants, yes, well, dare I say CHS lawsuit.

I am willing to bet good money that whoever wrote the website for GW and FW and linked in GW terms of trade which specifcally deals with how local taxes are charged) wasn't a) a lawyer or b) a VAT accountant or they wouldn't have allowed this to creep in.

 Peregrine wrote:

 fullheadofhair wrote:
If the goods are dispatched to an alternative destination outside the country of the web store, then this tax will be deducted prior to applying the tax rate appropriate to the country of destination of the order.

No tax deducted, no tax was charged.

And that was my point before I read the GW terms of trade. As an ex-VAT accountant I argued quite vigorously that no VAT was charged. I now believe I am wrong.

They state that all European websites are VAT inclusive - .co.uk is a European registered website.

So the price when I go to forgeworld .co.uk includes VAT. They then fail to deduct it.

So you claim. GW will claim that the "web stores" in question are the gamesworkshop.com versions for each country, and FW is not included. They will succeed in doing so.

I don't claim. GW in the ToT claims it to be so. FW ToT explicit state the tax addendum from GW.com is a binding ToT. Therefore, the ToT applicable to FW.co.uk are te rules for European websites.

As you say, lets see what the outcome is.

Boomstick wrote:
This thread hurts my head but think that going after a company like FW which on the whole is well respected and provides a great service to the community on a technicality is a really horrid thing to do just to save a small amount of money.

ummm, let's say it is correct. If someone in the US place and order for $800 how is being overcharged by 17.5 or 20% depending on the date of the order a "service to the community"?

 Peregrine wrote:

 fullheadofhair wrote:
They state that all European websites are VAT inclusive - .co.uk is a European registered website.

And, as I said, GW will argue that that statement refers only to the various country-specific versions of gamesworkshop.com and the fact that FW is hosted on a .co.uk address does not mean that it is included. You're arguing a technicality about a summary page that isn't a formal legal document.

I can accept that you may disagree with my reason and that I could be wrong and you could be right.

However, you are wrong with statement that theToT on a website aren't legal terms. That is why you have to be very careful when you write them.