HMRC to help make tax system fairer
The Treasury has announced new legislation which is hoped to even the playing field for businesses trading in the UK and ensure that they all pay their fair share of tax.
This comes after an announcement by Whitehall’s spending watchdog that during the 2015-16 financial year, online retailers based outside the European Union (EU) had failed to pay up to £1.5 billion of unpaid tax.
The introduction of joint-and-several liability means that for the first time, online marketplaces, such as eBay and Amazon, need to ensure that businesses on their platforms understand and abide by the UK’s tax rules.
The legislation, which has been enforced since 15t March, states that marketplaces must also ensure that online sellers display valid VAT numbers on their site.
A spokesperson for the Treasury said: “While the honest majority pay what they owe, some businesses that sell goods online to UK shoppers are failing to pay the correct amount of VAT.
“This behaviour unfairly undercuts businesses trading in the UK that play by the rules, abuses the trust of buyers and deprives the Government of significant revenue that funds vital public services.
“We are clear that everyone must pay their fair share of tax and tackling tax evasion in all its forms is a top priority for the Government.”
It is hoped that this new legislation will also increase consumer confidence in shopping with genuine VAT-registered businesses.
If you have any questions about complying with the new rules, our specialist advisors are here to help. Please contact us today.