Campaigners call for more action from HM Government re ‘Chinese VAT fraud’

Labour’s Shadow Treasury Minister Rob Marris MP has called on the Government to go further than recently announced UK Budget measures when it comes to tackling VAT fraud on online sales via marketplaces such as eBay and Amazon.

He says: “To protect UK small businesses who play by the rules, the government must do a lot more, to enact strong measures to stamp out VAT fraud in online sales.”

Morris added: “I am surprised and disappointed that there have yet to be any prosecutions for this kind of VAT fraud, despite solid evidence of its growing prevalence. Honest retailers and small businesses are being undercut by these fraudsters. I am pleased that, after sustained pressure, the government has at last announced some measures – for example the new requirement for a non-EU based business to have a UK-established tax representative, but I am concerned that these long-overdue measures do not go far enough.”

We wrote about the new Government measures last month.

Richard Allen of Retailers against VAT Abuse Schemes commented, “HMRC have had the information they have needed to act since 2010. This is not a difficult or complex issue given the blatant non-payment of VAT and the close involvement of major online retail platforms. The evidence is overwhelming and the legal precedent exists for third party liability. It requires nothing other than enforcement and prosecution.”

He added, “Whilst the due diligence for fulfilment operators and obligatory UK tax representation for non-UK sellers is welcome, the proposed third liability notice does not make anyone liable for any lost VAT. It is a lame duck.”