In 2020/21 (as at 15 January 2021), HMRC had issued 80 data requests to online platforms for information about online sellers it suspected of evading UK VAT. The figures, revealed by UHY Hacker Young, are down from 2,684 data requests in the previous tax year. Where not picked up by HMRC, overseas sellers evading UK VAT will gain a competitive advantage over domestic UK retailers who are required to report their sales and pay VAT.
Since 2018, online retail platforms must ensure their sellers display a valid VAT number on the site and report their sales to HMRC correctly. If platforms do not meet these requirements, they can be made jointly liable for any unpaid VAT.
The accountancy firm reports that HMRC’s near suspension of data requests is part of its aims to reduce burdens on businesses during the covid-19 pandemic, with priority having been given to the roll-out of the covid business support schemes.
Sean Glancy, partner at UHY Hacker Young, said: ‘HMRC’s decision to not investigate overseas online sellers risks allowing them to use tax evasion to undercut UK retailers with relative impunity. Online marketplaces need to be a level playing field for all sellers and right now, HMRC is allowing sellers overseas to have an unfair advantage.’
On 1 January 2021, new rules were introduced requiring online overseas sellers to register for VAT in the UK when selling items under £135 to UK customers. UHY Hacker Young questions whether, if the existing rules are no longer being enforced, these new rules will be upheld.
In 2020/21 (as at 15 January 2021), HMRC had issued 80 data requests to online platforms for information about online sellers it suspected of evading UK VAT. The figures, revealed by UHY Hacker Young, are down from 2,684 data requests in the previous tax year. Where not picked up by HMRC, overseas sellers evading UK VAT will gain a competitive advantage over domestic UK retailers who are required to report their sales and pay VAT.
Since 2018, online retail platforms must ensure their sellers display a valid VAT number on the site and report their sales to HMRC correctly. If platforms do not meet these requirements, they can be made jointly liable for any unpaid VAT.
The accountancy firm reports that HMRC’s near suspension of data requests is part of its aims to reduce burdens on businesses during the covid-19 pandemic, with priority having been given to the roll-out of the covid business support schemes.
Sean Glancy, partner at UHY Hacker Young, said: ‘HMRC’s decision to not investigate overseas online sellers risks allowing them to use tax evasion to undercut UK retailers with relative impunity. Online marketplaces need to be a level playing field for all sellers and right now, HMRC is allowing sellers overseas to have an unfair advantage.’
On 1 January 2021, new rules were introduced requiring online overseas sellers to register for VAT in the UK when selling items under £135 to UK customers. UHY Hacker Young questions whether, if the existing rules are no longer being enforced, these new rules will be upheld.
