HMRC have just released a press statement “HMRC tackles online VAT fraud in time for Christmas. They have handed out 7,185 VAT numbers to Overseas Online retailers in the last year, that’s a tenfold increase in last year’s figures of 695 due to their crackdown of Online VAT Fraud.

However reading between the lines is seems to be desperate attempt by HMRC to get some positive PR and be seen doing something positive in tackling the online VAT fraud they have ignored for the past ten years. The press release simply proves Online VAT fraud is enormous with 7,185 previously unregistered overseas retailers deciding to register for VAT.

It’s worth noting our comments in FT & The Guardian on the HMRC news:

The Guardian – MPs poised to investigate VAT fraud on Amazon and eBay
The Financial Times – Online sales clampdown nets VAT registrations

Lets hope HMRC’s next press release is more news worthy such as; “HMRC close down 7,185 oversea’s online VAT Evading retailers on eBay & Amazon” !!

HMRC have some serious questions to answer;

1) How much undeclared VAT has HMRC recovered from these previously unregistered online retailers?

2) How many of these retailers have declared on their VAT registration forms that they have made no previous undeclared sales?

3) How many of these retailers have HMRC asked to appoint a VAT representative or provide a financial guarantee?

4) How much VAT in now being collected from these previously unregistered retailers?

5) How many Joint and Several Liability notices have been issued to eBay & Amazon for non VAT compliant online retailers?

6) How will HMRC monitor these retailers VAT Returns are true and correct?

One must ask themselves is HMRC handing out VAT numbers without any due diligence or investigation into the retailers previous online trading history?

Great PR stunt HMRC – doesn’t wash with us!