HMRC has reported that 7185 online sellers from overseas have registered for UK VAT under new powers granted in the 2016 British Budget. That’s a tenfold increase on the 695 who registered in 2015.
With a growing number of overseas sellers on online marketplaces such as eBay and Amazon, last Christmas alone it is estimated the Exchequer lost tens of millions of pounds to VAT evasion.
Under the rules which came into force in September, HMRC can now force overseas retailers to appoint a UK-based VAT representative or provide a financial guarantee. If the overseas retailer fails to comply with HMRC’s directions, then the online marketplace they use to sell their goods can be held liable.
Financial Secretary to the Treasury, Jane Ellison says: “Having worked in the retail sector, I know what an important time of year this is for retailers and the millions of workers across the country who work in the sector. These new powers will mean that everyone has to play by the same rules and pay the right tax.”
vatfraud.org says of the news: “It’s all well and good HMRC handed out 7185 VAT numbers to internet retailers in the last year; it just proves this fraud is enormous.
“What HMRC failed to say is how much undeclared VAT they have recovered from these retailers. We want to know if HMRC is simply giving out VAT numbers without any due diligence or investigation into these retailers’ online trading history.”