It will be of little surprise, but a Guardian investigation has found that VAT fraud on the eBay and Amazon marketplaces is still prevalent. Despite new powers granted HMRC, and promises from both to cooperate the Guardian says “huge numbers of VAT fraudsters are illegally selling goods tax-free to British shoppers on Amazon and eBay this Christmas.”
And some categories are particularly dominated by overseas sellers. “The market for many goods is now dominated by overseas sellers, says the report. “On eBay, for example, 40% of UK sales of Android phones are to firms registered in China. Meanwhile, Chinese-based companies account for more than 60% of sales of Christmas tree fairy lights on eBay.co.uk.”
eBay said in a statement earlier this month: “We work closely with HMRC to ensure our sellers comply with their VAT obligations. If we are informed by HMRC that a seller is not complying with these requirements, then we will take appropriate action, up to and including permanent suspension.
We have already contacted hundreds of overseas sellers to notify and educate them on the need to comply with the law and we will continue to remind sellers of their obligations.”
Amazon also said something similar in early November: “HMRC is tracking VAT compliance, and under UK law, Amazon is required to disclose to HM Revenue and Customs (HMRC) seller account data on request if HMRC believes a seller may not be compliant. Under the new legislation, HMRC can now inform websites such as Amazon Marketplaces if it believes a seller in in breach of VAT regulations and require that we stop the seller from selling through Amazon.co.uk and that we remove the account“.
Online seller group VATfraud.org: “Despite the new laws, HMRC have shown a woeful lack of action. There are many fraudsters who were reported to HMRC years ago but are still trading, and evading VAT, today.”
The question has got to be: when will it will become apparent to users that VAT dodgers from overseas are no longer trading in such numbers? That’s not the case yet.