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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.

Quick guys stock up on FW before the colonials lob it into the harbour. :-)

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.

 dragqueeninspace wrote:
Quick guys stock up on FW before the colonials lob it into the harbour. :-)

That about sums it up perfectly oh my god.

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.

Holding on to VAT that they charge US customers for and not claiming it on their sales and what not to the government is what we like to call "a crime"

All that will happen is that FW will make a mirror site called ForgeWorld.com, and the prices will be the same as they are now, but listed in USD with the 20% still included.

One could almost guarantee it. As for the VAT man, I hope FW's upper management gets what it has coming.

This gentleman and ladies, is a really bad case of paper work. Remeber, paying for a local tax man is worth the troubles.

That's why I always confirm my purchase price with UK retailers. Places like Antenociti's Workshop automatically deduct the VAT when you sign in from a non-UK account.

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?

 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.

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.

 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.

 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.

 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.

From my order confirmation email:

 Fafnir wrote:

Total amount due including £0 VAT: £160.16

Using a standard template for their confirmation email doesn't mean they're actually charging you VAT. It just means they should have been clearer about "including VAT" meaning "including VAT, if any".

 Fafnir wrote:

 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.

From my order confirmation email:

I'm going to go out on a limb here and say it does indeed look like VAT was included. Why else would it say Inc. VAT?

 ObliviousBlueCaboose wrote:
Why else would it say Inc. VAT?

Because FW uses a standard template to automatically generate the confirmation email and doesn't use different ones depending on where you order from. What this really means is "including VAT if any". It doesn't mean that VAT has been charged (note that no amount for the VAT is given), it's just saying "this is your absolutely final amount, you won't be charged extra taxes on top of this".

 ObliviousBlueCaboose wrote:

 Fafnir wrote:

 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.

From my order confirmation email:

I'm going to go out on a limb here and say it does indeed look like VAT was included. Why else would it say Inc. VAT?

Well as Peregrine said above it could be a standard receipt template.

Fafnir what was all of the charges? does the vats addup?

4 items priced at 35.75 (so including shipping, all charges are accounted for). It doesn't specify whether VAT is included in the price of the individual items or not.

 Peregrine wrote:

 ObliviousBlueCaboose wrote:
Why else would it say Inc. VAT?

Because FW uses a standard template to automatically generate the confirmation email and doesn't use different ones depending on where you order from. What this really means is "including VAT if any". It doesn't mean that VAT has been charged (note that no amount for the VAT is given), it's just saying "this is your absolutely final amount, you won't be charged extra taxes on top of this".

I've had US receipts that say "Total inc Tax" with out listing the tax amount paid on that line. 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?"

Edit: Also European stores include the taxes in the price of items (something I'd wish US stores would follow.) So we don't know for sure if they subtract the cost from shipping or not.

 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.

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

When I go to FWs site, from the US, I select my items, add them to the cart, and then checkout, all in £. It never asks me where I'm from until I fill out the shipping info. And it says on FWs site that all prices include VAT. And the last two receipts I got for my Krieg models both included VAT. I'm paying the £ price on the site (which includes VAT), i'm charged a conversion fee from £ to USD, and there is never a 'higher price equivalent' mentioned anywhere. If FWs site said "all prices include VAT, unless your buying from ROW, then it doesn't" I'd agree with you. That's not what it says.

 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.

It's really not hard to set up a web cart to not charge taxes to people outside a certain area. I did it non my web store and I am not even a web developer so if I can do it they can too. It's just lazy that they are doing this because if I were to charge my international clients sales tax then they would be ticked.

 Empchild wrote:
It's really not hard to set up a web cart to not charge taxes to people outside a certain area.

Again, they aren't charging you taxes. They're just charging you the same total price that a tax-paying customer would have to pay, because you're willing to pay it. Why drop prices to reflect the lack of VAT when people are willing to buy at the higher VAT-equivalent price and you can collect extra profit?

@Peregrine

Point of order, UK VAT has been at 20% for a number of years.

Not relevant to what you were saying, but may be relevant further down the road, as this one looks like it has legs...

Edit Nvm, realised you are actually calculating it the correct way!

I don't think either of your options is correct, based upon two things

1: The first paragraph of the Tax Addendum

Taxes that apply to your purchase

Games Workshop is an international business and has to comply with tax legislation in all the territories in which it trades. The taxes that apply to you transaction are determined by the destination to which the goods are being shipped (see also the note on web store pricing).

2: FW do not, to my knowledge, add a VAT element (at any rate) of anything but 0 to their invoices for US order.

The first bit clarifies what legislation is in play for taxation. In this case US, so no VAT.

The second bit is the clincher, when you get your item your invoice has no VAT, so you cannot claim it back.

The text relating in the remainder of the tax addendum does not help clarify matters as to if the value you see includes a vat element or not but I don't think that is important, they don't add the VAT to the order and there is no VAT due on it.

As they never took a VAT payment from you you cannot get a refund (they did charge you more, but not from the point of view of the consumer)

 azreal13 wrote:
as this one looks like it has legs...

It really doesn't. People have thought "hey I can get a nice VAT refund check from all those expensive FW purchases", investigated it, and found that FW is not collecting VAT on those orders and you can't get a refund.

 Peregrine wrote:

 azreal13 wrote:
as this one looks like it has legs...

It really doesn't. People have thought "hey I can get a nice VAT refund check from all those expensive FW purchases", investigated it, and found that FW is not collecting VAT on those orders and you can't get a refund.

That won't stop them disagreeing with you though!! We already seem to have hit the terminal loop that many threads get into, so now its either wait for the lock or for new info that supports one side or the other.

 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.