Since the Government has cracked down on online tax evasion in the UK, HM Revenue and Customs (HMRC) has revealed that more than £200 million has been recovered in lost VAT from overseas sellers.
In order to stop overseas sellers undercutting UK based business prices online, over 4,600 ‘red flag’ notices have been issued by HMRC to online marketplaces such as Amazon and eBay.
In the last two years, there have been a total of 7,000 investigations carried out by the UK’s tax authority on online merchants who have been evading sales taxes on goods sold in the UK.
HMRC estimated that between £1 billion and £1.5 billion in collections were lost in 2017 by companies failing to pay sales taxes on goods.
Furthermore, figures revealed that between £600 million and £900 million of the unpaid taxes were coming from overseas sellers.
Since enforcing a stricter system, there were 58,000 VAT registration applications between 2017 and the end of 2018, compared to only 1,650 between 2015 and 2016.
Mel Stride, Financial Secretary to the Treasury, said: “Delivering a fair and level playing field for businesses is a top priority for this Government.”
“These figures show that HMRC, working closely with the major online marketplaces, is making real headway tackling this serious and damaging evasion.”