Overseas reselling giants targeted by HMRC

Online retail conglomerates eBay and Amazon are the focus of a VAT crackdown by HM Revenue and Customs (HMRC) amid claims the sites are colluding with resellers to avoid paying tax.

It’s thought that many of the most popular items on major British online shopping sites are sold by overseas vendors that don’t pay VAT charges. Thus resulting in the tax authority considering how it can enforce the likes of Amazon and eBay to bear the brunt of these costs.

The charge against these companies is being led by Conservative peer, Lord Lucas, who is calling on HMRC to investigate in order to ensure “effective and speedy enforcement for the fairness of the tax system” and that “honest internet retailers” are protected.

“Amazon and eBay have been collaborating with hundreds of overseas retailers to defraud the tax-man of millions of pounds every day,” added Lucas.

Lord Lucas wants HMRC to investigate the number of small overseas merchants who have imported goods into Britain ahead of the festive season, before doing deals with Amazon to dispatch their stock from its UK warehouses.

The Guardian recently reported that many overseas resellers give virtual office or residential addresses in China, Hong Kong and the United States and often deal in high-value items such as iPads and smartwatches.

An HM Treasury spokesman confirmed an HMRC taskforce has now been created to tackle this specific issue, following meetings with senior figures at eBay and Amazon. It will be tasked with investigating the dealings and assessing what action needs to be taken.

It’s not the first time that UK tax practices have been called into question at Amazon headquarters. The firm was criticised in 2013 for paying no corporation tax at all on its profits in 2011.

Only last month a group of British firms who sell via Amazon and eBay launched a petition calling on the Government to take action to stop online VAT fraud by tightening tax regulations which apply to these such websites.

Date published 29 Dec 2015 | Last updated 29 Dec 2015