(Bootle) (Lab): ...Our
proposals seek to address the growing levels of online VAT fraud
and the responsibility of online retailers to play a much-needed
part in tackling it. We now all spend a large proportion of our
lives online, so it is unsurprising that more UK consumers than
ever are buying a larger proportion of their goods through online
marketplaces such as Amazon, eBay and others. In 2016,
14.5% of all UK retail sales were online, up from 2% in 2006. Just
over 50% of those sales were through online marketplaces rather
than directly by the seller...
...The Campaign Against VAT Fraud on eBay & Amazon in the UK estimates that online
VAT fraud
“equates to £27 billion in lost sales revenue & additional
taxes to UK businesses and the public purse in the last 3 years”
alone. What is more, HMRC has stated that it does not have data
on online fraud and other losses before 2015-16, and as far as I
am aware it does not plan to repeat the review of lost tax for
future years. Similarly,
“HMRC estimates do not account for the wider impacts of online
VAT fraud and error such as distortion of the competitive market
landscape.”
...Trader groups, such as the Chartered Trading Standards
Institute, have been raising concerns for many years, and claim
that online VAT fraud has been a problem from as early as 2009,
yet the Government did not recognise the problem until 2015.
Nearly three years later, the Government are finally introducing
measures that will force the Amazons and eBays of this world to be
held jointly accountable for the VAT of online vendors that use
their sites...
...Professor de la Feria also believes that part of the
reason that HMRC has been slow to tackle online fraud is that it
is most likely considered not cost-effective to pursue it. Online
marketplaces and HMRC are not doing enough together to tackle the
problem, notwithstanding the action that has been taken. Online
marketplaces continue to earn their commissions, and so their
profit, from people who are defrauding the British
taxpayer. Amazon, for example, organises regular
presentations at Chinese fairs—a point referred to by the hon.
Member for Ochil and South Perthshire—to recruit overseas
sellers, I suspect; has plans to buy a shipping company; and
fulfils orders and handles payments. That all suggests a very
embedded relationship with the seller. Those connections and
networks are there; people must know each other to set them up.
HMRC should use those relationships and networks to do something
about the problem...
...According to HMRC, some online VAT fraud is due to a
lack of awareness, some overseas sellers being unaware that they
need to pay VAT. Both Amazon and eBay, when testifying to
the Public Accounts Committee, agreed with that view and
described the lack of awareness of VAT rules as a major element
of the problem. What efforts has HMRC made to educate sellers in
the UK about potential VAT fraud? More importantly, what efforts
have been made to ensure that overseas sellers are aware of the
need to pay VAT?..
...Amazon and eBay have both made huge
assertions about the level of action they have taken to deal with
sellers on their websites not paying VAT, and about the efforts
they have made to collaborate with HMRC. However, Amazon started collecting VAT numbers
from non-EU sellers only six months ago and, perhaps most
worrying of all, told the Public Accounts Committee last year
that knowing whether a non-EU seller has a valid VAT number is
not a crucial data point. HMRC has reported resistance from
online marketplaces when it comes to sharing data that is not
held in the UK’s jurisdiction, so it is clear that there is a lot
more work to do...
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