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.”
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.”
Given that most of the online sellers who are liable to register for VAT are outside the jurisdiction it is difficult or probably impossible for HMRC to bring a prosecution. The proposed extension of the VAT joint and several liability measure may result in greater compliance. However those that provide online market places will be liable for the tax unless they can demonstrate they took every precaution to ensure transactions were not tainted by fraud. This requires they to do more than just to conduct due diligence. Instead they need to look at all the available information and the prevalence of fraud.
to many big cheeses pissing in the same pot to get anything done
if vat/tax is not paid , just close there ebay/amazon accounts and sieze FBA stock and auction it off or destroy it , if HMRC keep closing there accounts they will soon get the message
this does need a dedicated HMRC ebay/amazon team to enforce who understand the fraud and can spot tax/vat fraud , there is lots of UK based sellers avoiding vat aswell and smaller ebay sellers selling knock off products from a bedroom who are not paying tax who need to be prosecuted and back tax/vat paid
HMRC need to close tax/vat dodging ebay/amazon accounts and freeze FBA stock until the unpaid back dated vat is paid
if not sell the FBA stock at auction or destroy it , HMRC also need a dedicated online ebay/vat team to constantly look at ebay /amazon accounts to spot tax/vat fraud and act quickly on these accounts
this is the only way , ebay and amzon will do nothing as long as they are making profit
left 2 comments , tamebay keep removing them