£1.2bn crackdown on foreign VAT dodgers

THE Treasury’s plan to target rogue foreign firms that dodge VAT by selling through websites such as Amazon and eBay could net £1.2billion a year.

Currently companies abroad can illegally get away with selling goods for knockdown prices on the sites by avoiding the UK VAT rate of 20 per cent, undercutting British businesses and depriving the public coffers of valuable revenue.

The Chancellor has announced owners of the trading platforms, such as Amazon and eBay, will now be made jointly liable for the collection of VAT. As a result, tax collectors in HM Revenue and Customs may be able to require these companies to pay any missing VAT if traders based overseas fail to pay up.

Mr Hammond told MPs: ‘Following representations from a number of my honourable friends, we are also taking further action to address online VAT fraud, which costs the taxpayer £1.2billion per year, by making all online marketplaces jointly liable for VAT.’

Websites like Amazon and eBay benefit from the illicit trade because they take fees from the firms selling their goods on their websites without paying the proper sales tax.

Last month, Meg Hillier MP, pictured, chairman of the Public Accounts Committee, said: ‘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.’

Recently, the eBay vice-president Joe Billante said: ‘We don’t want any of these sellers on our platform. If we are notified, we take action.’

In a statement last month, Amazon said it supported efforts to ensure sellers across all marketplaces were VAT-compliant.