The British Government Might Make Amazon Liable For Value Added Tax In Britain
Top tax officers are making efforts to explore whether Ebay and Amazon can be compelled to foot the bill for ballooning valued added tax fraud associated with small overseas vendors’ army which is rapidly dominating sales of many famous goods on the leading trading webpages of United Kingdom.
An investigation conducted by Guardian has been able to find out that a large number of highly valued gifts encompassing Panasonic cameras, Fitbits, Apple Watches and iPads are being sold through the UK webpage of the electronic commerce giant without value added tax being charged.
In recent times, record numbers of small overseas merchants have imported products into UK prior to the Christmas rush, making an arrangement for the online trading giant to dispatch goods from its warehouses in Britain. Most of these value added tax free vendors give residential or virtual office addresses in US, Hong Kong and People’s Republic of China. A lot of their details have not been disclosed to the Her Majesty’s Revenue & Customs.
Last month, eBay stated it will report a number of merchants on its website to HM Revenue &Customs after Guardian shared with it evidence of Chinese merchants giving invalid valued added tax numbers as well as cloning or sharing numbers of other enterprises.
An spokesperson of the Treasury informed the House of Lords that HMRC had formed a taskforce to conduct an investigation regarding the evasion of VAT by overseas online merchants. Crucial meetings with senior officials at eBay and Amazon took place in November.
During a brief discussion on the evening of Monday this week, Conservative peer Lord Lucas argued that eBay and Amazon had been “collaborating with hundreds of overseas retailers to defraud the taxman of millions of pounds every day”. The accusation has been vehemently denied by the two organizations.
The organizations have insisted that sellers utilizing their platforms are responsible for charging the right VAT. eBay and the ecommerce giant have stated they play their role to help merchants comprehend their tax obligations, but aren’t required to comply with the police.
Both stated they could not be held liable if evasion takes place. But spokesperson of Treasury Lord Ashton stated HRMC was now “looking at all possible options”, including “whether online platforms should be made liable for VAT”.
In Brussels, senior sources stated the current VAT regulations belong to a pre-internet era and were now exposed to widespread violation. One stated “Transport costs are going down, logistics are quite easy, the postal market is open to everybody – all these factors [have created] a huge increase in trade. And it’s very difficult to control … The system is so complicated, it’s open to abuse.”
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