Amazon and eBay to be made liable for VAT fraud by sellers

Amazon and eBay are to be held liable, in some cases, for VAT fraud committed by a growing army of overseas sellers using their websites – and costing Britain hundreds of millions of pounds a year in lost tax receipts.

The chancellor is giving tax inspectors new powers to warn high-risk overseas sellers active in the UK through eBay and Amazon. If, after those warnings, sellers do not correctly collect VAT within 30 days, eBay and Amazon can be held liable for the missing tax.

The treasury estimates this measure will recoup GBP 875 million in lost VAT receipts over the next four years – though it is not expected to halt tax fraud altogether. The total cost to the taxpayer of this abuse was officially estimated at GBP 1 billion to GBP 1.5 billion a year.