eBay and Amazon Sellers Defraud UK Tax Department Of Millions
The e-commerce industry is growing at a rapid pace across the globe and sellers from around the world can make use of e-commerce giants like Amazon and eBay to ply their goods in the United Kingdom. During a recent debate in the House of Lords, Lord Lucas highlighted the fact that while UK nationals spend millions of pounds in online shopping transactions, the overseas sellers are not subject to any VAT for selling their goods and services in the United Kingdom.
Lord Lucas stated that the UK tax department was losing millions of pounds every year as these online overseas sellers were evading VAT charges and accused Her Majesty’s Revenue and Customs (HMRC) of being slow in cracking down on these discrepancies. Lord Lucas urged the HMRC to ensure that the tax system in the UK was imposed on all internet retailers and wanted these issues to be addressed at the earliest.
The HMRC has been monitoring the e-commerce business in the UK and has recently deployed twenty five percent of its workforce to address these issues and come up with robust solutions.
The HMRC also organized a meeting in November with some of the biggest online retailers in the UK and met with senior management to discuss possible changes that will be rolled out early next year.
The UK online market has witnessed a massive increase of overseas retailers especially from Europe who use online websites like eBay and Amazon to sell their goods and services in the UK and do so without having a VAT number. Whereas sellers in the UK have a VAT number and need to pay taxes on all their online transactions. This unequal balance has made it difficult for UK online retailers to maximize their profits and compete with overseas online retailers.
Rita de la Feria, professor in tax law at Durham University stated that online retailers like eBay and Amazon must take these complaints seriously or could be faced with a policy where they become liable for VAT. eBay has made it clear that they will comply with all policies rolled out in the UK.
In a statement, a representative from eBay said
eBay reminds all its users of their need to comply with their legal obligations and we also provide helpful guidance on VAT through our Policies and Help pages with the aim of providing a safe and fair marketplace for all our buyers and sellers. If eBay sellers are found to be breaching UK VAT compliance rules, we will cooperate with HMRC in all cases where HMRC provides evidence of underpayment of taxes.
