Amazon told to help f ight tax dodgers

MPs say web giants must do more to halt rogue sellers’ £1.5bn fraud

internet giants Amazon and eBay and the taxman must do more to stop rogue traders defrauding taxpayers of up to £1.5billion a year, MPs say.

Online sellers based overseas can dodge VAt they should charge on sales in the UK, allowing them to undercut British firms, a parliamentary report shows.

they can charge 20 per cent less than UK companies. But Amazon and eBay still earn commissions ‘and therefore profit from people who are defrauding the British taxpayer’, the Commons Public Accounts Committee (PAC) said.

MPs called on the Government to crack down on online VAt fraud, and said customs authorities have been ‘too cautious’ when pursuing fraudsters.

the PAC also said the loss to taxpayers could be higher than the estimate of between £1billion and £1.5billion.

Committee chair and Labour MP Meg Hillier said: ‘Online VAt fraud is hugely damaging yet, as online sales continue to grow, the response of HMrC and the marketplaces where fraudsters operate has been dismal.

‘HMrC needs to be far tougher in protecting the interests of British businesses and taxpayers.

‘As a priority it must inject more urgency into enforcement action. But it should also push the case for further new powers.

‘Online marketplaces tell us they are committed to removing ‘‘bad actors’’, yet that sentiment rings hollow when those same marketplaces continue to profit from the actions of rogue traders.

‘they can and should do more to drive them out and we will expect online marketplaces to co-operate fully with HMrC in tackling non-compliance.’

Online purchases increased from 2 per cent of retail sales in 2006 to 14.5 per cent last year. Under tax laws, traders based outside the european Union selling goods to British customers must charge VAt if the items are present in the UK at the time of sale.

But many do not charge the 20 per cent duty, even though the goods may be stored in up to 3,000 warehouses around the UK known as ‘fulfilment houses’.

Labour MP Peter Dowd, the shadow chief secretary to the treasury, said large multinational corporations had ‘outfoxed’ HMrC.

Both Amazon and eBay told the committee they took action to remove ‘bad actors’ from their sites. But the PAC report called for this to be stepped up, noting that the internet giants had taken ‘such little action to date’.

the cross-party committee also called for ‘much more urgency’ from HMrC, which ‘has not named and shamed non-compliant traders and so far has not prosecuted a single seller for committing online VAt fraud’.

the committee also called on HMrC to put in place by March a co-operation agreement with online marketplaces, including a requirement for them to ensure that a valid VAt number is showing for any non-eU trader selling goods to British consumers, where the items are in the UK.

An eBay spokesman said: ‘We want a fair marketplace for all our buyers and sellers.

‘that’s why we have been working together with HMrC – and going above and beyond their requirements – to continue to ensure that our site is the best possible place to do business.’

An Amazon spokesman said: ‘We are reviewing the committee’s recommendations and support efforts to ensure businesses and individuals selling across all marketplaces are VAt-compliant.

‘We offer extensive information, training and tools to assist sellers in their VAt obligations and we work closely with HMrC on this matter, sharing all requested data on non-eU sellers and promptly removing any seller they inform us is not VAt compliant.’

‘Sentiment rings hollow’