The Smell of Bullshit, part 61: VAT cats getting vatter

Have a look at this post I did earlier this year. Lush seem to have found a solution to the issue of non-EU customers being charged VAT on purchases from Lush UK when they shouldn’t be. Their website says

We just wanted to let you know that from the 1st November prices have changed for our online customers that live outside of the EU. We believe in equal prices for everyone which is why all our customers that shop with us at www.lush.co.uk will pay the same price regardless of where they live. The price you see in your basket is the price you will pay.

 

Lush UK prices for goods sold to EU customers include VAT at whatever rate VAT currently is – 20%? 17.5%? I dunno. When non-EU customers bought from Lush, the VAT should have been removed, so the price would be lower. But as we saw in the post linked to above, the retail website didn’t remove the VAT when it should have done, and Lush asked non-EU customers to place their orders by phone instead so that the VAT could be removed manually.

And now? They’re just not bothering. Non-EU customers will pay the same prices as EU customers pay, which are inclusive of VAT. Will Lush declare that extra to the taxperson as VAT or will they just pocket it as extra profit? Either way, they’re charging non-EU customers more than they have to and trying to pretend it’s fair. It might be because they’re too lazy or too incompetent to sort the issue out with the website, or it might be because they see it as an easy way to make more money out of people. But it’s definitely not fair.

 

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16 thoughts on “The Smell of Bullshit, part 61: VAT cats getting vatter

  1. Actually it’s worse than what you’re saying. I placed an order last month and got a huge discount off what I would pay from my local Lush website, Lush USA. If I purchased from the Lush USA website the price on most items would be higher and an 8.75% local sales tax would be applied to my order based on my city and state. For my Lush UK order shipping was a bit more expensive but was more than offset by the lower item prices and the fact that VAT was automatically deducted at checkout. I guess they fixed that issue. But I’m sure I’m not the only US customer that was doing this, and they cracked down. Now they’re saying that everyone pays the same. Which I’m okay with, honestly. But that’s not the reality. I called my friend in the UK to ask her to place an order for me which I would pay her for through paypal and she said that VAT was ADDED to her order. Meaning that VAT was no longer included in the purchase price as it was before. ?????? So now I’m really confused. Either Lush UK just hiked prices in the UK by quite a bit or there’s a website issue.

  2. If you were buying Lush UK products in America, you shouldn’t have been charged VAT, and there was no need for them to crack down on anything! It’s usual in the UK for any prices shown to include VAT – it wouldn’t say £10 + 20% VAT, it would just say £12.
    I’ve just had a look at the website and prices are still showing as inclusive of VAT. I made a fake basket totalling £27.45, and the payment page showed £31.40 total, which is £27.45 products and £3.95 p&p, but it did specify that £5.23 of the product cost was VAT. The way they’ve designed the page, if you weren’t paying close attention it would look like they’re adding VAT, but the prices shown are inclusive of VAT.
    There’s still no excuse for them to be hiking prices for non-VAT paying customers though.

  3. I apologize – you’re completely right. I’m just unfamiliar with how VAT works – in the US taxes are added on rather than built into the price.

  4. Ok so im glad that you posted this up because I thought I was the only one who saw their little Nov. 1st disclaimer. Basically what lush uk is doing is charging Vat when it is stated that it is not legal for the UK to charge Vat to anyone who doesn’t live there. Im pretty upset because I buy from the kitchen and lush uk is the only place you can find the kitchen and I dont want to be ripped off.

    • Well, I suppose Lush would say they’re not charging VAT to non-EU customers, they’ve just raised the prices to what people pay if they are paying VAT. It’s mustelid to say the least, but Lush would argue it’s lawful.

      • That might depend on whether the invoice shows VAT….

        Dodgy anyway, as the purchaser in the US will then have to pay their own import taxes on arrival in the US – mmm double taxation. Really ethical, that.

      • True, they’re not responsible for tax law, just ignoring it – not fair that they choose to double tax their customers because they cba to work their site properly…however if they’re showing VAT included on the sale, they have to pay it over to HMRC, because they’ve charged it. Are their sales going to differentiate and show the VAT inclusive price as exc. VAT?

        Also…

        We believe in equal prices for everyone which is why all our customers that shop with us at http://www.lush.co.uk will pay the same price regardless of where they live. The price you see in your basket is the price you will pay.

        Erm…that’s not equal prices for everyone, is it? Those outside the EU will pay more in the end….D’oh!

        Mind you, I’m still reeling from the other posts I caught up on this afternoon…especially the full moon comments…ugh

      • Lush aren’t double taxing anyone. They’re just charging non-EU customers as if they were paying tax. What we need is someone from outside the EU to place and order and let us know what the receipt says.

  5. I’m from outside EU and I just saw this disclaimer. I don’t understand what’s going on, are they charging me more?

      • Just checked, by asking a friend from Sweden to mimic the same order, and she was charged 28.70, while I was charged 30.70. Considering the standard of most of the outside-of-EU countries and the fact that there might be customs if they feel like it (it’s very random here), this is beyond unfair.

      • Well, email Lush and tell them you won’t be buying any more from them ever again – and then stick to it. Try Future Primitive or The Sugar Loaf Soap Company, or any of the other small businesses selling great products.

  6. Hmmm….this could get interesting. They’re charging US customers VAT tax; what are they doing with that tax? Pocketing it? Wouldn’t that be, like, illegal in the UK?

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