PARLIAMENTARY WRITTEN QUESTION
Tax Evasion: VAT (22 February 2021)

To ask the Chancellor of the Exchequer, what estimate he has made of the revenue lost to the public purse as a result of VAT evasion by overseas sellers on online platforms in each of the tax years (a) 2015-16, (b) 2016-17, (c) 2017-18, (d) 2018-19, (e) 2019-20 and (f) 2020-21 to date.

Asked by:
James Murray (Labour)

The information requested is not held. HMRC estimate the tax gap, which includes VAT evasion, and publish this in the ‘Measuring tax gaps’ publication. However, HMRC do not specifically hold estimates for VAT evasion by overseas sellers on online marketplaces for the periods requested. HMRC estimate that the tax loss from VAT fraud and error on online marketplaces was between £1 billion and £1.5 billion in 2016/17. The department estimates that overseas sellers contributed to approximately 60% of that VAT loss.

From 1 January 2021, the Government introduced changes to the VAT treatment of overseas goods making online marketplaces directly liable for UK VAT on many of the sales they facilitate - ensuring that overseas online marketplace sellers cannot outcompete UK High Street stores and UK online retailers by evading their VAT liabilities.

Answered by:
Jesse Norman (Conservative)
25 February 2021