Caroline Flint

Standing up for Don Valley.

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Doncaster businesses hit hard by unfair tax practices

PC_Caroline_and_Nigel_Mills_online_fraud.JPGPublic Accounts Committee member, Caroline Flint has warned that Doncaster businesses need a level playing field after leading an enquiry by the powerful parliamentary committee which has highlighted the role online sellers play in undercutting UK businesses, by the non-collection of VAT.

Caroline said:  “I want every Doncaster business to know we are standing up for them against unfair and illegal tax practices by overseas competitors using online trading platforms.

“Our Committee’s investigation into online VAT fraud has exposed that if UK businesses continue to undercut by up to 20% many will lay off staff and even go out of business.

“This is not fair to the taxpayer or to decent tax-paying businesses.  I don’t want Doncaster jobs lot to competitors who play by a different set of rules.  HMRC has got to rout out the worst offenders and come down hard.”

In their report, the Committee warns that online sellers who do not charge VAT when they should can undercut prices offered by UK businesses by up to 20%, and that taxpayers are also losing out as online VAT fraud leads to a significant loss of revenue to the Exchequer, depriving public services of funds at a time of austerity.

The report says UK taxpayers lost £1 billion to £1.5 billion in 2015–16 from online VAT fraud

Meg Hillier MP, Chair of the PAC, said: "Online VAT fraud is hugely damaging yet, as online sales continue to grow, the response of HMRC and the marketplaces where fraudsters operate has been dismal.

“HMRC needs to be far tougher in protecting the interests of British businesses and taxpayers. As a priority it must inject more urgency into enforcement action. But it should also push the case for further new powers.

“Online marketplaces tell us they are committed to removing 'bad actors' yet that sentiment rings hollow when those same marketplaces continue to profit from the actions of rogue traders.”

HM Revenue & Customs (HMRC) estimates that UK taxpayers lost £1 billion to £1.5 billion in 2015–16 from online VAT fraud. The Committee concludes the authority's estimate of the impact of such fraud is "out of date and flawed" and sets out measures for HMRC to address this.

See the Committee at work HERE.


The report summary can be found here:


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