HMRC exploring options re VAT avoidance from overseas sellers on eBay and Amazon

According to the Guardian, HMRC and Treasury officials are slowly coming round to the issue of overseas sellers not paying VAT on UK sales on marketplaces eBay and Amazon. This is, in part, thanks to the efforts of Lord Lucas that we wrote about yesterday.

The Guardian has been investigating the situation and has bought items where VAT should be paid but been unable to prove that sellers have been fulfilling these obligations. You can read the latest article here.

And of all the options on the table, one under consideration is holding the marketplaces themselves responsible for the VAT. Treasury spokesman Lord Ashton noted HMRC was now “looking at all possible options”, including “whether online platforms should be made liable for VAT”.

As the Guardian says: “Top tax officials are exploring whether Amazon and eBay can be forced to foot the bill for ballooning VAT fraud associated with an army of small overseas sellers who are rapidly coming to dominate sales of many popular items on Britain’s leading shopping websites.”

It’s hard to see how such a system might work. But it seems that the issue is now on the UK Government’s radar.