back to article HMRC told AGAIN to toughen up on VAT-dodging online traders

The UK taxman has been told to crack down on online traders that aren't paying their fair share of VAT when they sell on sites like Amazon and eBay. The House of Commons Public Accounts Committee has been pushing the government to stop the scourge of online marketplaces damaging UK business and the government's coffers for …

  1. Wolfclaw Silver badge

    Never mind going after the little guys, like traders, go after the likes of Amazon, Apple and the rest of the big tax dodgers first !

    1. Anonymous Coward
      Anonymous Coward

      Amazon, eBay and the rest

      Just force them to collect the VAT and pass it on.

      They don't want to, so don't give them the option.

      1. AMBxx Silver badge

        Re: Amazon, eBay and the rest

        Annoyingly, Amazon know which of their traders are VAT registered. If you use a business account, you have the option to filter them all out.

        Not only do the VAT-dodgers undercut UK businesses illegally, it's also a problem when you buy something for business expecting to reclaim the VAT and find the seller isn't registered.

        1. Roland6 Silver badge

          Re: Amazon, eBay and the rest

          > it's also a problem when you buy something for business expecting to reclaim the VAT and find the seller isn't registered.

          Then realise that the seller ain't going to supply a receipt, so expensing it becomes problemmatic.

        2. grep-v

          Re: Amazon, eBay and the rest

          If the seller isn't VAT registered, you didn't pay VAT to him so there is nothing to claim really. You didn't lose anything.

          Many small eBay sellers are bellow the VAT threshold for compulsory registration.

  2. tiggity Silver badge

    How hard can it be?

    "HMRC is also consulting on a new way to collect VAT that would allow the tax to be taken from online payments in real time. However, the committee said that "even if this were an appropriate method, introduction of split payment is some way off"."

    It's not exactly difficult (so long as you handle zero vat rated items) to implement something like this.

    Any point of sale grabbing of tax by the taxman is potentially good, by virtue of it being harder to evade the tax

    1. AMBxx Silver badge

      Re: How hard can it be?

      Tricky bit is filtering out all the people who sell their stuff second-hand on Amazon or Ebay.

      1. Lee D Silver badge

        Re: How hard can it be?

        Why?

        If they have to mark all their products as "used" to be VAT-free, then they're not going to like doing that for big-brand items (i.e. the things that sell for the most money).

  3. Bavaria Blu
    FAIL

    not a high priority

    It seems stopping these tax scams is not a priority for HMRC. Recently the UK was found not to be implementing import duties effectively.

    https://www.bbc.com/news/uk-politics-43328398

    In my experience with the UK and Germany, tax collection is very lax in the UK. Perhaps this "red tape" or following the rules is seen as anti-business. Ironically illegal imports are bad for (local) businesses who can't compete with online shops who play fast and loose with the rules.

    I would imagine HMRC lacks the resources to implement the rules properly.

  4. Crisp Silver badge

    They'd get a bigger return on investment if they just got multinationals to pay their taxes

    Why spend so much money recovering pennies when they could spend much less recovering pounds?

    1. Bavaria Blu

      Re: They'd get a bigger return on investment if they just got multinationals to pay their taxes

      VAT is 20% so quickly adds up to billions. If you don't enforce the current rules, what hope is there to introduce new rules to stop multinationals from minimising their tax bills?

  5. Mike Shepherd
    Meh

    Amazon

    Amazon is convenient for small quantities of electronic development items. But their Chinese traders (despite being VAT-registered in the UK) often struggle to produce a valid VAT invoice or receipt. They may omit their registration number or the figures quoted just don't make sense.

    Amazon claims to act only as broker. It's not clear that this has yet been tested in court. (They collect your cash, but claim that any problems are between you and the seller). If the cash receiver were liable to pay the VAT, they'd likely tighten up very quickly.

    1. Bavaria Blu

      Re: Amazon

      Yes as a broker amazon are no more liable than the bank who transfers the money. Making brokers responsible for paying VAT would make a lot of sense.

      I once bought a fake Casio watch on Amazon. I was really surprised that both Casio and Amazon didn't really give a toss. Due to Gresham's Law "the bad drives out the good" which means if a marketplace contains fake goods, no one will be prepared to pay the price of the real goods. So the sellers of the genuine article cannot operate.

      Perhaps Casio thought they would rather customers went to Argos (fair enough) and Amazon thought, if the fakes supplier pays me commission, why should I care?

      1. Yet Another Anonymous coward Silver badge

        Re: Amazon

        Even worse, Amazon co-mingle stock. So if you buy a Casio from a totally reputable retailer on Amazon you are just as likely to get the fake one shipped to their warehouse by Dell Boy as you are to get the genuine one if you buy from Trotters Independant Trading Fulfilled by Amazon.

        That's why nobody buys sd cards or (non-amazon brand) batteries on Amazon anymore

        1. codejunky Silver badge

          Re: Amazon

          @ Yet Another Anonymous coward

          "That's why nobody buys sd cards or (non-amazon brand) batteries on Amazon anymore"

          Really? I do (sd cards) and have yet to have a problem but I will keep an eye out in case anything changes.

          1. Yet Another Anonymous coward Silver badge

            Re: Amazon

            I'm currently a dirty job stealing immigrant in the former colonies - Amazon might not do this in Europe.

        2. Jack of Shadows Silver badge

          Re: Amazon

          I buy electronic hardware of all kinds on Amazon, yes, including SD cards. Never a problem although I only buy SanDisk simply for the fact that we were talking on Twitter and one compained that his SD card had died. Less that five minutes later SanDisk wanted his particulars so they could send him a new card. That's service worth paying for here.

          1. thejynxed

            Re: Amazon

            Corsair will do the same. PNY, not so much.

    2. MonkeyCee Silver badge

      Re: Amazon

      "But their Chinese traders (despite being VAT-registered in the UK) often struggle to produce a valid VAT invoice or receipt."

      That's because they aren't VAT registered, they are just claiming so, and/or using another companies VAT number.

      Amazon doesn't do anything to check if a VAT registration is legit, nor do they seem to care when you point it out to them.

      They are also remarkably relaxed about fake goods too.

  6. codejunky Silver badge

    Hmm

    "It is estimated that the UK is missing out on between £1bn and £1.5bn a year from online VAT fraud,"

    So the claim. And once implemented I wonder what the actual figure will be if anything. kinda like all those fraudsters with offshore investments turning out to be doing nothing wrong, instead to actually follow the laws of the various countries.

    Will see.

    1. JimmyPage Silver badge
      Flame

      Re: Hmm

      "It is estimated that the UK is missing out on between £1bn and £1.5bn a year from online VAT fraud,"

      Which I bet will cost £2billion to collect ....

  7. Anonymous Coward
    Anonymous Coward

    missing out on between £1bn and £1.5bn a year from online VAT fraud

    Sure and it'll probably cost £2bn to collect it knowing how these things work.

  8. Blockchain commentard Silver badge

    It's a slog to chase £1 billion? How effing lazy have those effing a-holes become?

  9. Trollslayer Silver badge

    With what resources?

    Their computer systems are antiquated, give them the tools to do the job.

  10. gregsih

    It is far easier for HMRC to go after small sole traders or PSC's they can't fight back like Amazon etc can.

  11. C. P. Cosgrove

    And ?

    On-line is fine for generic goods and I like cheaper as much as the next woman or man, but you can't beat brick and mortar stores for getting hands-on feel for some things. Unhappily this is getting harder.

    But if cheaper means tax evasion somewhere along the line that hurts every one. Honest businesses go out of business and the individual tax rate has to be increased which hurts me !

    Chris Cosgrove

    1. Giles C

      Re: And ?

      I have to agree, for commodity items online is fine, but when buying camera equipment I need to have a play with it to see it is right. Only problem is no camera shops round here (Peterborough) it is either Lincoln, Norwich or London to look at kit....

      1. Jack of Shadows Silver badge

        Re: And ?

        Keyboards, mice and displays here. I long ago learned that hands/eyes on really has to be done if I don't want to get into a game of returns until I find the right part.

  12. Anonymous Coward
    Anonymous Coward

    How much tax did Vodafone manage to pay for last year?

    Doesn't the law of diminishing returns demand that HMRC start hassling the big players for their fare share of tax, or is that not how bullying is meant to work?

    1. codejunky Silver badge

      Re: How much tax did Vodafone manage to pay for last year?

      @AC

      "Doesn't the law of diminishing returns demand that HMRC start hassling the big players for their fare share of tax"

      They did. Then they found that the big players were paying their fair share (all that was legally due). If we need more tax money it must come from the middle class. When the middle class realise that they will start asking why we pay so much tax and get so little for it.

  13. Anonymous Coward
    Anonymous Coward

    I got a visit from the TaxWoman

    HMRC came to my house once, I live in a part of Glasgow most would be uncomfortable walking/driving through (any time of day). She presented her credentials then told me I owed about £250 from four years previously, I was stunned, I said what about vodafone, starbucks, amazon, why aren't you at their door. She even chuckled and said "you never mentioned the football" (ask a Glaswedgian, this was 2014).

    I asked for details of why I owed, she couldn't get through to the office so took my phone number then randomly called me for weeks offering to let me pay it back at lower and lower weekly amounts, ended up they said we'll take a fiver a week, I said OK send me the details of why I owe the money. A year later they took it off me and my new Missus through tax credits, cheeky bastards.

    Fours years later, house visit, numerous phone calls, surely all that cost more than 250 quid. Maybe I'm special.

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