Tamebay Comment: eBay and Amazon could do more to tackle VAT dodging overseas sellers

There is no doubt we have a problem. Let’s not beat about the bush: those marketplace sellers from outside the EU, often from China, are gaining an unfair advantage over homegrown sellers by using loopholes in the UK tax system.

This means they don’t pay VAT at 20% on goods being sold into the UK when, quite frankly, they ought to.

Obviously HMRC could do more. And we encourage all aggrieved sellers to contact their local MP on that and rester a protest (for all the good it will do, but it’s worth doing.).

Tamebay’s leverage lies with the marketplaces themselves. What pressure can we collectively exert there for a change of policy?

One thing eBay and Amazon could do, as the duopoly marketplaces for ecommerce small businesses, is show rather more respect to law-abiding, tax-paying, compliant and competent small businesses paying their VAT. Both eBay and Amazon could ensure that all registered company information and VAT numbers shown on their sites is verified and genuine.

It seems to us that by retreating to a legal minimum approach to VAT dodginess, eBay and Amazon are kicking honest sellers in the teeth. These are firms that play fair and pay all due VAT to HMRC and also make the marketplaces what they are. These firms also pay a minimum wage and abide by health and safety regulations and create jobs here in the UK.

A few minutes of research on eBay and Amazon will reveal “Chinese sellers” with dodgy business details.

The free pass that eBay and Amazon give to “Chinese sellers” who test the flexibility of the UK tax regime isn’t just a blow to the national coffers. It’s two fingers up to UK sellers doing their best and also a sanction that doesn’t serve UK buyers for the best either. It’s a lose all round.

We call on eBay and Amazon to step up and appreciate EU based sellers and take steps to verify the bona fides of all sellers on their marketplaces. The seller details, the registered addresses and VAT numbers, must be screened and verified as real and accurate. It’s a good practice that will only increase buyer confidence.

Currently, we don’t ask eBay or Amazon to act as a de facto tax authority and report who is trading more than £82k a year to HMRC. Indeed, our request is very small. Help your buyers and sellers operate in an honest, trustworthy environment.

Here’s our suggestion to eBay and Amazon: ensure that registered business details and VAT numbers on your site are real and robust. It really is that simple.

In the last day or two we’ve seen some evidence that eBay may, in fact, be doing this. They could be cracking down on Chinese sellers breaking the rules and we’re hopeful that will do more. And when we can be certain, we’ll report back.