Amazon and eBay investigated for VAT fraud

Published on: 22nd December 2016

A committee of MPs is poised to launch an investigation into Britain’s online shopping fraud crisis.

Amazon-and-ebay-480Sellers on Amazon and eBay have evaded hundreds of millions of pounds in tax in the run-up to Christmas.

Conservative MP Richard Bacon, who sits on the public accounts committee, said: “I think this is absolutely an issue we need to look at. We’ve already been discussing VAT fraud in online retailing informally, and I expect that it is something the committee will want to turn to.” Parliament’s public accounts committee has previously played a part in other tax scandals involving the likes of Starbucks, Google and Amazon.

In recent years, overseas sellers – particularly from China – have dominated many online selling categories on eBay and Amazon, illegally selling goods without VAT. This has resulted in many small British businesses unable to compete.

The National Audit Office could also be asked to examine the subject, and how well it has been addressed by HM Revenue & Customs.

HMRC has since admitted VAT evasion in online shopping had become “a very big issue”, and estimated that it has cost up to £1.5bn a year in lost tax. Lin Homer, head of HRMC, told a parliamentary committee: “We do feel that those people who manage a supply chain should ensure enough diligence is built into it. Marketplace providers have responsibilities.”


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