The fraud has increased because foreign companies selling goods to UK shoppers, usually via online marketplaces like Amazon and eBay, are keeping some of their stock in UK warehouses to provide next day delivery. If items are dispatched from UK soil, the sellers have to charge VAT at 20%. Nevertheless, many have not been, therefore undercutting genuine UK suppliers and reducing tax revenue, the committees report found.
The report estimates up to GBP 1.5 billion has been lost from third-party sellers on online marketplaces not charging the tax on sales they make in the UK. MPs in the Public Accounts Committee criticised HM Revenue and Customs (HMRC) for being “too cautious” in pursuing the “fraudsters”, according to BBC. Nevertheless, Amazon and eBay said they were working with HMRC on the issue.
The reports conclusions include that the UK’s tax agency, HMRC, should set up an agreement with online marketplaces by March 2018 to tackle the issue, and the websites should require non-EU sellers, which dispatch goods already in the UK, to provide a valid VAT number.
In a statement, Amazon said it was reviewing the report and supported efforts to ensure sellers across all marketplaces were VAT compliant, the online publication continues. Also, an eBay spokesperson said it was going “above and beyond” HMRCs requirements to provide a “fair marketplace for all our buyers and sellers”.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now