HMRC campaign to force internet retailers to police for VAT fraud “unprecedented”

As featured in Accountancy Age – 27.04.18

Following the announcement that HMRC is asking e-commerce platforms like eBay and Yahoo! to report suspected VAT fraud, Dominic Arnold, Tax Investigations Partner, comments: “These proposals are quite unprecedented from HMRC. It is asking online marketplaces to look for signs of tax evasion amongst its users, throw them off the site and report them to the tax inspector.

“It is taking the outsourcing of tax compliance work to a new level.

“We expect this initiative to lead a sharp rise in HMRC prosecutions of small e-commerce traders.”

Under the proposals, online retailers will have to:
  • Educate online sellers from the UK and abroad about their VAT obligations.
  • Takes swift against the seller that the platform suspects is not paying VAT, including removing them from the website if non-payment persists.
  • Provide data to HMRC about their sellers when requested within 30 days.
HMRC will publish a list of all the online marketplaces that sign up to the agreement and remove them if they fail to meet their commitments.

“Whilst the agreement is non-statutory, it is clear signal from HMRC that it expects online market places to do their work for them and root out anyone who it suspects of dodging its VAT obligations.

“Whilst larger platforms such as eBay and Amazon have the resources to monitor users of their platform, the proposals represent a huge financial burden for smaller retailers.

“The message from HMRC is clear: it is no longer good enough to pay your own tax, but you need to make sure everyone you are associated with is also paying the right tax too.”

To discuss the potential impact of these proposals on you or your business, please contact Dominic Arnold.

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