Staff Writer AccountingWEB
Share this content

HMRC cuts data checks despite VAT fraud increase

HMRC has radically reduced inquiries into sellers using online platforms despite apprehension over VAT evasion and increased complaints from retailers.

18th Feb 2021
Staff Writer AccountingWEB
Share this content
Amazon eBay online shopping
istock_MattiaMarasco

April 2020 to Jan 2021, HMRC sent only 80 data requests, its lowest figure, to online platforms on sellers using their service, compared to 2,684 requests in the previous tax year. The information was provided from a freedom of information (FOI) request made by UHY Hacker Young.

Figures released under the FOI:

Year

Data requests issued by HMRC

2016-17 (first year HMRC gains  request capacity)

299 

2017-18

1,556

2018-19

2,317

2019-2020

2,689

2020-21

80

According to HMRC, it has reduced data requests to cope with the reallocation of HMRC to manage Covid support measures, including CJRS and SEISS.

“Online marketplaces need to be a level playing field for all sellers and right now, HMRC is allowing sellers overseas to have an unfair advantage,” UHY Hacker Young partner Sean Glancy told the Financial Times, who originally reported the FOI.

Glancy capitulated that HMRC had done a “vitally important job” supporting furlough, but that it “can’t come at the cost of allowing tax evasion to run out of control”.

HMRC’s diminished ability to inspect online sellers, therefore, raises questions about its capacity to enforce new Brexit tax regulations introduced in January, added Glancy. The new rules obligate online overseas vendors to register for UK VAT if selling items under £135 to UK consumers.

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:

Tick iconView all AccountingWEB content
Tick iconComment on articles
Tick iconWatch our digital shows and more

Access content now

Already have an account?

Replies (1)

Please login or register to join the discussion.

By SteveHa
18th Feb 2021 16:08

Quote:
According to HMRC, it has reduced data requests to cope with the reallocation of HMRC to manage Covid support measures, including CJRS and SEISS.

This was as far as I got before HMRC outraged me. They will continue to cut all the corners that they feel like to meet the needs caused by the pandemic, whilst forcing the profession (who quite frankly, are doing most of the work for them) to absorb it with no concessions whatsoever.

It's about time that HMRC practices were put out to public scrutiny in a transparent fashion, with full details of what they will do, and what they don't condone compared with what they themselves do and don't do.

Perhaps, then, the taxpaying public will get a feel for how much discrimination there is between the Government and the people there really is.

Thanks (1)