Traders who evade paying tax of 20%

COMPANIES whose turnover is more than £85,000 a year must register with the HMRC to pay VAT of 20 per cent.

This cost is meant to be added to the price the customer pays.

Amazon operates as an online marketplace hosting many of these sales on its website.

But it is not liable for the traders’ VAT because it is simply facilitating the transaction – not selling the wares itself. This means that Amazon leaves it to the overseas firms to register for VAT and to pay what is due.

However, because many foreign sellers don’t, MPs said yesterday that Amazon should do far more to root out businesses that defraud the taxpayer in this way.

Amazon insists it has removed hundreds of these so-called ‘bad actors’ – but the Public Accounts Committee said yesterday that it was not doing enough.