The government has launched an investigation into VAT evasion by overseas third-party sellers on platforms such as Amazon and eBay.
UK retailers say they are being undercut by foreign companies, particularly from China, which sell their products through etailers like eBay and Amazon but fail to charge VAT, the Financial Times reports.
The Treasury said a HM Revenue and Customs taskforce was gathering intelligence on any fraudulent activity. It will look at whether the etailers in question should have to foot the bill for any unpaid taxes.
It comes after Conservative peer Lord Lucas claimed during a debate in the House of Lords this week that the Amazon and eBay have been “collaborating with hundreds of overseas retailers to defraud the taxman of millions of pounds every day”. This allegation is denied by both.
Lord Ashton, a Treasury spokesman in the House of Lords, said: “HMRC has established a taskforce to undertake operational and intelligence-gathering to investigate this form of VAT evasion by overseas online retailers.”
Amazon and eBay have insisted responsibility for charging the correct VAT lies with sellers using their sites, according to the FT.
They said they help sellers understand their tax obligations, but have no duty to police compliance and cannot be held liable in cases of evasion.
But Ashton said HMRC was now “looking at all possible options”, including “whether online platforms should be made liable for VAT”.