Ecommerce firms Amazon and eBay have been accused by MPs of profiting by ‘turning a bling eye’ to organised criminals using their online market places to sell goods. A number of UK politicians accused the companies of profiting from VAT evasion to the detriment of UK business.
During a public accounts meeting, Labour MP Caroline Flint challenged eBay vice president Joe Billante and Amazon vice president Steve Dishman over their failure to clamp down on those illegally selling products into the UK without paying VAT. Flint claims that because of their failures, many UK business have been undercut and have even gone out of business. In April, the National Audit Office disclosed that failure to declare tax from online retailers outside the EU lost HM Revenue & Customs up to £1.5 billion.
“Whatever your relationship to the seller, the byproduct of Amazon and eBay and other online marketplaces is that you are profiting from the evading of tax by these overseas sellers. That is a fact, isn’t it?” Flint said.
While both Amazon and eBay admitted that they don’t want these sellers on there sites, they said it is the legal responsibility of the sellers who trade on their platforms to determine and declare any VAT that arises from the sale of goods or services. Billante said: “We don’t want any of these sellers on our platform. If we are notified, we take action.” While Dishman acknowledged there was a problem. “We need all sellers to compete equally. That is what we are focused on,” he said.
But it was not just the ecommerce giants who came under fire. MPs also took aim at tax officials from HMRC, criticising them for not enforcing the rules strictly enough. Amazon has previously been accused of not paying its fair share of corporation tax in the UK. It paid just £7.4 million last year despite billions in sales.