Amazon and Ebay to share data with HMRC in bid to tackle overseas tax evasion

 
Josh Mines
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Both companies will share their data with HMRC in a bid to cut down on overseas tax evasion (Source: Getty)

Companies including Amazon and Ebay have agreed to give their data to HMRC in an effort to crack down on value added tax (VAT) evasion by overseas retailers.

The deal will mean the companies will provide merchant's data to tax officials so that fraudulent trends can be spotted.

Online marketplaces will be invited to sign the data sharing agreement and HMRC have said that it will publish a list of all the organisations who have conformed to the measures later this month.

Read more: Businesses are unprepared for this weekend's new criminal tax evasion laws

Major players including Ebay and Amazon both confirmed that they will take part in the scheme, which covers all online marketplaces in the UK.

It follows a Public Accounts Committee (PAC) report last autumn which found that British business was: "being hit hard by unfair and illegal tax practices by overseas competitors using online trading platforms."

PAC also criticised HMRC in the report, saying it had been slow to react to the problem and needed to be tougher on overseas marketplaces.

It's estimated that UK taxpayers lost between £1bn and £1.5bn in 2015-16 to online VAT fraud.

Companies who sign the agreement will commit to provide data to HMRC to identify fraudulent sellers, understand the scale of their operation and find their contact details.

A letter from HMRC's chief executive Jon Thompson sent to the head of PAC Meg Hillier on 27 March 2018 revealed that the tax service had worked with "a number of online marketplaces to produce an agreement."

"HMRC will publish this agreement in April 2018 and invite online marketplaces to become signatories to it," he wrote. "A list of those who have signed will also be published and updated at regular intervals."

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