- 17th January 2019
- Posted by: Suzy Hill
- Category: Business News
£200m extra VAT recovered from online sellers
HMRC has collected over £200m in unpaid VAT from overseas sellers using online marketplaces in the past two years, since the introduction of a new regime to tackle tax avoidance which enables it to flag up those who are not registered for VAT
HMRC sends joint and several liability (JSL) notices to online marketplaces when it finds a seller using its platform not paying the correct VAT. If the seller is not removed from the site, the marketplace will be pursued themselves for any future unpaid VAT by those sellers.
Overseas sellers are defined as those who sell goods stored in the UK to UK consumers and who do not have a business establishment in the UK. It also includes sellers based outside the EU selling goods to a UK consumer which are then imported into the UK.
HMRC has launched 7,000 investigations resulting in 4,600 JSL notices being issued to online marketplaces since rules were introduced in September 2016.
During the same period, the number of applications for VAT registration by overseas businesses grew to 58,000. This compares to just 1,650 applications between 2015 and 2016.
Mel Stride, financial secretary to the Treasury, said: ‘Delivering a fair and level playing field for businesses is a top priority for this government.
‘These figures show that HMRC, working closely with the major online marketplaces, is making real headway tackling this serious and damaging evasion.’