No system has been in place to deal with the VAT compliance of UK and international sellers. As a result of this, a number of online retailers sell to UK consumers VAT free. They should, in fact, be VAT registered and charging VAT as appropriate.
This has directly impacted the high street for those in more traditionally focused businesses. They have to be VAT compliant. Now, we’re not suggesting that these companies have purposefully skirted their responsibilities as to VAT, it’s just that it’s unfair.
HMRC agree, and that’s probably got something to do with the £1.5billion of VAT receipts that they’re missing out on. Just a few weeks ago, the big players in this space agreed to a data sharing agreement with HMRC. As far as we know the data provided will be the business name of the seller, contact details and the amount of UK sales the online seller has made.
It appears there is no more hiding place for the non-compliant VAT seller on an online marketplace. Now they just need to make the large tech companies pay their share. After all, it’s only fair.