Business

MPs accuse Amazon and eBay of profiteering from VAT fraudsters

HMRC: About £1.5bn lost due to overseas sellers' tax swerve

By Kat Hall

51 SHARE

MPs have accused Amazon and eBay of profiteering out of companies based overseas that are fraudulently using their platforms to dodge VAT - and supposedly putting Brit SMEs out of business while they're at it.

In a Public Accounts Committee hearing, MPs heard that Amazon had collected the money from products sold by 23,000 non-EU companies from its British warehouses, many of which were suspected of avoiding the 20 per cent tax.

Steve Dishman, Amazon’s vice-president for taxes, and Joe Billante, eBay vice president, both said their companies were cracking down on sellers failing to declare their VAT numbers.

PAC chair Meg Hillier acknowledged the companies' efforts to tackle fraudsters, but added "you are still getting your commission off people who have defrauded the British tax payer."

Committee member Caroline Flint said: "We are talking about billions of pounds of VAT lost to HMRC and lost to the UK and alongside that, [it is] putting out of business legitimate [companies] that are playing by the rules."

According to figures from last year, the tax gap from unpaid VAT by due to overseas sellers failing to declare their tax is between £1bn-£1.5bn.

Billante said: “To be clear, I don’t want any of these sellers on our platform.” He said if someone is not compliant, they will take action.

Dishman said Amazon is actively going through their list of sellers to request VAT numbers. He said about 67 per cent of revenue from non-EU sellers is attributed to VAT numbers - but added that doesn’t necessarily imply 33 per cent are non-compliant.

He said the company had been sharing its data with HMRC. However, Jon Thompson, the head of HMRC, said Amazon was not providing “complete transparency” on the foreign retailers that were using its site.

The Register has previously reported on the seemingly growing number of sellers based outside Europe who hold stock in the UK, but sell goods online without having a registered VAT number.

One small business owner, who asked not to be named, said the practice had undercut his business for consecutive years to the point where he no longer employs staff.

Two years ago, a Register analysis revealed iPad sellers based outside the UK are selling cut-price fondleslabs in Blighty after seemingly bypassing UK VAT payments. ®

Sign up to our NewsletterGet IT in your inbox daily

51 Comments

More from The Register

HMRC told AGAIN to toughen up on VAT-dodging online traders

MPs: Fraudsters still damaging public purse and businesses

HMRC contractor scores IR35 payout after yet another taxman blunder

CEST tool gets it wrong – for its own creators

Amazon, eBay and pals agree to Europe's other GDPR: Generally Dangerous Products Removed from websites

Only in EU land – tough luck for the rest of the world

Amazon and eBay agree to expose potential VAT evaders for UK tax man

Voluntary agreement gets green light – irony klaxon sounded

CEST la vie, IR35 workers: HMRC sets out stall for ignoring Mutuality of Obligation

Don't have a cow, but taxman test disappears MOO

Peers to HMRC: Digital tax reforms 3 days after Brexit? Hold your horses, how 'bout 3 years...

Updated Sweeping changes to VAT will hit small biz, says committee

UK.gov's no-deal plans leave HMRC customs, VAT systems scrambling to keep up

Pity the external software devs – they only just found out about this!

HMRC rapped as Brexit looms and customs IT release slips again

Public Accounts Committee 'concerned' businesses haven't been told how to prepare

HMRC: 30 months to prep Northern Ireland backstop systems, 24 for customs

Nope, not from now – from whenever politicos make up their minds

HMRC delays digi tax plans amid Brexit customs woes

UK taxmen triaging projects to prioritise trucks' passage at Dover