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HMRC targets online sellers to crack down on VAT evasion

  • E-commerce allows offshore businesses to trade in the UK without much presence in the country, potentially avoiding tax obligations.
  • The government has taken measures to combat VAT evasion by offshore businesses claiming to be UK-based for VAT registration.
  • HMRC is now sending letters to UK VAT-registered businesses, requiring evidence of UK establishment or else they will be treated as non-established, affecting their liability for sales made through online marketplaces.
  • This may complicate matters for legitimate businesses and is seen as a temporary measure before the new operating platform reporting rules come into effect.
  • These rules will require online marketplaces to conduct due diligence on sellers and report their activity to HMRC, aiming to make VAT evasion more difficult.

Source RSM


VAT news
VAT news