MP seeks more action to tackle overseas marketplace sellers dodging VAT

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The British government body, the National Audit Office (NAO), is reportedly investigating whether HMRC is doing enough to tackle VAT evasion by overseas online retailers selling to British consumers.

HM Treasury estimates that the total possible lost annual revenue is something like £1.5bn. But former tax lawyer Charlie Elphicke MP (Conservative, Dover and Deal) believes the the sum of lost revenue to be significantly higher and in the region of £7bn each year. Elphicke sits on the powerful Public Accounts Committee (PAC) and is calling for tougher regulations and greater penalties for marketplaces, such as eBay and Amazon, warning that British businesses playing fair are at risk of going bust if the situation continues.

Elphicke says: “We cannot have a situation where British firms are being put out of business by overseas traders fraudulently gaming the system and dodging tax. People will be concerned that the huge warehouses that loom large by the side of motorways could be full of goods on which proper tax has not been paid. Amazon and eBay have serious questions to answer. We need a change in the law to make fulfilment houses jointly liable for all tax dues. Only then will we be able to get proper action to raise this much-needed tax – and stop British businesses and workers losing out to unfair competition.”

Last year HMRC was granted new powers to deal with the problem and the marketplaces can now be held liable for dodged VAT if they don’t cooperate. We wrote about that in this piece last September: HMRC now has new powers to tackle overseas sellers dodging VAT. But it now seems that the spotlight is back on in an attempt to discover whether enough is being done to tack the issue.

7 Responses

  1. Nothing is being done. As a UK business we always ask if VAT numbers are shown on eBay if we can have a VAT receipt and from one purchase shown as dispatching from the UK but giving a Chinese address we requested a VAT receipt and this was the message we received back.

    ukcharger888
    We are in the process of applying the VAT.At present we just place the goods in other people’s warehouse, and they help us to ship.we haven’t enough staff to prepare the VAT. We would also like to apply as soon as possible, will send VAT invoice to you once available.

    So I asked repeatedly as they were displaying a VAT number on all their eBay listings and got nowhere. So i rang eBay and reported the issue as they were getting all their eBay fees VAT free and they are still trading on eBay saying exactly the same thing when i request the receipt now 4 months later. I also rang HMRC at the same time who took all the relevant details and even went through the whole “are you safe to talk right now” and “do you feel threatened” yet as you guessed the seller is still on eBay and still saying the same thing.
    No one seems interested

  2. All talk NO action am afraid. Britain is well and truly open for business for EVERYONE except British business.
    Hammond shows what he thinks of those who go out there and do it themselves yesterday.

  3. The simplest way to deal with this is for HMRC to issue a new Customs Procedure Code purely for FBA shipments arriving into the country this can be linked to registered overseas NETP Vat registration holders and will stop customs brokers clearing these shipments into the UK on EORI numbers which allows the overseas seller to avoid any VAT payments.

  4. All the powers are in place.

    Even alot of work has been done.

    https://www.vatfraud.org/

    yet all they want to do is squeeze those already in the database.

    VAT is a whole 20%, they under declare import value, then dont pay income tax, dividend tax, or corporation tax. Raking it in.

    HMRC is a shambles and a joke to be honest.

  5. It is a lot easier to squeeze and pressure the law abiding UK traders who are already registered for VAT & income tax.. That is why we get chased and the Chinese importers who hide behind numerous companies never get the same chasing as we get.

    It appears that if you are law abiding and honest you will get penalised.

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