HMRC backs tax-paying retailers by ramping up pressure on websites facilitating VAT fraud
The UK’s tax office has asked all online marketplaces to sign an agreement to confront online VAT fraud committed by sellers on their platforms.
The agreement would place greater accountability on platforms such as eBay, Facebook and Amazon make to tackle non-compliant businesses, introducing a number of commitments.
Those that sign up would be obliged to educate online sellers in Britain and abroad about VAT obligations, respond quickly to HMRC requests and take appropriate action, and find ways to inform HMRC of seller information.
As part of its VAT fraud crackdown, HMRC will publish the list publicly and remove any platform which breaches its responsibilities.
Online VAT fraud facts
? Overseas traders selling goods to UK consumers online without VAT
? Undercuts UK sellers by up to 20 per cent
? Cost HMRC between 1bn 1.5bn in 2016
What is VAT fraud?
In October 2017, a?parliamentary investigation found that small UK business owners were being ‘severely undercut? by overseas competitors selling goods without VAT. MPs claimed HMRC’s response to online VAT fraud had been dismal, and also decided online marketplaces had not taken the issue seriously enough.
The tax office recently announced new world-leading powers? to tackle online VAT fraud through joint and several liability (JSL) rules.
As of January 2018, HMRC had opened 2, 100 investigations into non-compliant overseas businesses selling via online markplaces, with 1, 300 notices served.
Commenting on the new agreement, Mel Stride, financial secretary to the Treasury, said online marketplaces had enabled many small business owners to grow at a faster rate.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
Small UK marketplace sellers are being severely undercut by online VAT fraud committed by overseas competitors, according to a new parliamentary report that has demanded tougher action from HMRC on illegal tax practices. more»