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HMRC is Tackling Online VAT Fraud

Display VAT numbers in the help against VAT fraud

HMRC is tackling online VAT fraud. Changes first announced by the Chancellor in the Autumn Budget 2017 came into effect on 15 March 2018. From that date online marketplaces and direct website sellers must display valid VAT numbers when they are VAT registered.

Previously some overseas sellers have not met their UK obligations to register for VAT and charge VAT on their sales of goods stored in UK warehouses. These new powers allow HMRC to make online marketplaces accountable for VAT fraud committed by online sellers using their marketplace platforms. These joint and several liabilities for marketplaces allow HMRC to issue notices to the marketplaces to remove overseas sellers who do not register for VAT or pay the correct VAT in the UK. If they are not removed from these platforms HMRC will come after the marketplace for the outstanding VAT.

Businesses that trade in the UK and abide by the rules have found that their prices are being undercut by overseas business who have not registered for VAT when required to do so, this change in the law will help address this form of tax evasion.

This will also help online shoppers to make a more informed choice that they are buying from a business that is meeting its VAT obligations in the UK.

Annette Woods

Tax Advisor, Vantage Fee Protect

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