Parliament’s public accounts committee (PAC) has raised concerns that Amazon and Ebay are failing to tackle VAT evasion, despite the negative impact on small UK businesses.
On 13 September, PAC heard that companies are using websites such as eBay and Amazon to sell products to the UK without paying VAT, undercutting small British sellers. The online marketplaces profit from their commission.
Labour MP and committee member Caroline Flint told Steve Dishman, a vice-president at Amazon and Joe Billante, an eBay vice-president: “the byproduct of Amazon and eBay and other online marketplaces is that you are profiting from the evading of tax by these overseas sellers.”
Joe Billante commented: “We don’t want any of these sellers on our platform. If we are notified, we take action.”
MPs who had participated in online mystery shopping exercises stated that they had discovered companies without VAT numbers. Committee chairwoman Meg Hillier said that one company had offered her a 20 percent discount when she requested a VAT invoice.
It is estimated that up to a third of online British retail transactions may be fraudulent. Some overseas companies send goods to the UK for storage before they are sold on online marketplaces.
Ebay and Amazon both told the committee that sellers on their sites now have to prove that their companies are registered to pay VAT.