Just three marketplaces have signed up to the ‘Tackling online VAT fraud and error – the role of online marketplaces in co-operating with HMRC’ agreement. HMRC has published the list of marketplaces who have signed up to co-operate on VAT Fraud and error on marketplaces and (the very short list) contains the names of Amazon, eBay and Fruugo.
Which marketplaces will co-operate on VAT Fraud?
The list opened on the 25th April and HMRC published the list of first signatories to the agreement on the 29th of May. Amazon didn’t hesitate and signed on the 26th of April, eBay were swift to act signing by the end of the week on the 30th and the following week Fruugo signed on the 4th of May.
After the flurry of activity no other marketplace has signed the agreement in a month suggesting that either they’re not going to, they’re not willing to, or they’re still figuring out how to comply – the trickiest part of the agreement to co-operate on VAT Fraud is potentially data sharing, “each online marketplace agrees to find a suitable and legally compliant mechanism for providing HMRC with data on a timely basis”.
“The UK has led the way in holding online marketplaces accountable for VAT fraud committed on their platforms. This agreement goes beyond those legal obligations, with online marketplaces committing to helping their sellers understand their tax responsibilities and ensuring we have the information we need to take action against those who do not play by the rules. We welcome the commitment from those who have signed the agreement and encourage others to do the same.”
– HMRC Spokesperson
HMRC have said that they hope three marketplaces signing up to the list will shame others into doing the same (actually HMRC said ‘encourage’, but I think we all know what they meant). We’re aware that there are more online marketplaces actively talking to HMRC and may well be in a position to sign the list in the near future.
What are the online marketplaces signing up to?
The agreement is that “online marketplaces commit to providing HMRC with data about the businesses operating on their marketplaces (selling to UK consumers) both in bulk form and on an individual business basis to assist HMRC with tackling online VAT fraud and error”. In other words if you’re trading on eBay, Amazon or Fruugo HMRC can find out everything they like about your business so make sure you’re fully paid up on your VAT and other taxes.
Marketplaces also agree to educate their sellers regarding VAT obligations and take action whenever presented with evidence of potential non-compliance with UK VAT registration obligations. This includes blocking or banning sellers where their are concerns regarding VAT compliance and report sellers they ban for this reason to HMRC.
Specifically, what information will be shared with HMRC?
HMRC are asking for data to enable them to identify individual business sellers and calculate the value and volume of UK sales of individual businesses.
Marketplaces will also share your business contact information with HMRC so that the tax collectors can get in touch.
This is the minimum information an online marketplace must provide if they sign up to the agreement.