Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many businesses have been investigated for VAT evasion that took place before January as a direct result of changes to VAT remittance and collection arrangements that came into effect that month.
Answered by Lord Agnew of Oulton
On 1st January 2021, new legislation introduced by the Government took effect which changes the rules for the VAT treatment of goods sold by businesses based overseas. These changes were introduced to further address non-compliance and evasion of VAT.
HMRC has a long-standing programme of compliance activity with such businesses, which continues. Since 1st January 2021, HMRC has investigated 4,488 businesses for non-compliance with VAT obligations that took place before then.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many overseas businesses selling directly into the UK by mail order have registered for UK VAT since 1 January; and what assessment they have made of the impact of the obligation to do so.
Answered by Lord Agnew of Oulton
From 1 January to 31 October 2021, the number of overseas businesses with the declared classification of ‘retail sale via mail order houses or via internet’ that have registered for VAT in the UK is 12,111.
On 27 October 2021, the Office for Budget Responsibility set out their assessment of the fiscal impact of the new rules for overseas goods introduced from 1 January 2020, which includes the requirement for overseas businesses to register for VAT in the UK for the sale of low value imported goods. Based on outturn data for the current year it is now expected that the measure will generate £1.4 billion in 2021-22, rising steadily to £1.8 billion by 2026-27, a fivefold increase on the previous estimate.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how much additional VAT revenue they have collected as a result of the changes to online platforms’ VAT liability that came into effect in January; and what assessment they have made of the effectiveness of those changes.
Answered by Lord Agnew of Oulton
The Government introduced changes on 1 January 2021 which meant that online marketplaces were liable to account for UK VAT on sales of goods in consignments valued £135 and below which are outside the UK at the point of sale, and for goods of any value sold by overseas sellers that are in the UK at the point of sale. The Government also removed Low Value Consignment Relief, which relieved VAT for goods imported into the UK in consignments up to £15 in value.
On 27 October 2021, the Office for Budget Responsibility set out their assessment of the fiscal impact of these changes as part of their Economic and Fiscal Outlook. They estimate the measures will generate £1.4 billion in the year 2021-22, with an expected increase each year following this.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have to replace the Certificates of Tax Deposit Scheme with a comparable replacement; and what consultation they will undertake on this subject.
Answered by Lord Bates
There are no plans to replace the Certificate of Tax Deposit Scheme.
Closure of the Certificate of Tax Deposit scheme will make the tax system simpler and fairer. New certificates are no longer available to buy but existing ones will continue to be honoured until 23rd November 2023, giving up to six years for existing users to adjust to the change. There are no plans for consultation on a replacement.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what amount of VAT was not recovered from sellers who were served with notices in the last 12 months.
Answered by Lord Bates
In the 12 months since the joint and several liability provisions came into force, HMRC has issued 500 notices to online marketplaces through which overseas businesses sell.
In all of these cases, the marketplaces have removed the sellers from their platforms, preventing further losses of VAT through fraudulent sales.
Joint and several liability notices remain in force until the sellers become fully compliant with their VAT obligations, which includes payment of all previously owed taxes, plus interest and penalties.
To the end of August 2017, HMRC had raised assessments for unpaid VAT on those sellers totalling £43.6m, with a further £71m due to be assessed on sellers still under investigation.
The VAT paid by overseas businesses has increased from £6m in 2015 to £27m in 2016, and it is expected to continue to rise significantly in 2017.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many fulfilment houses had stock seized by HMRC in the last 12 months.
Answered by Lord Bates
In the last 12 months HMRC has seized stock from 9 fulfilment houses.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether HMRC obtain data on the amount of goods that non-UK sellers on Amazon and eBay import into the UK; and if so, whether they reconcile that data with declared sales.
Answered by Lord Bates
HMRC cannot disclose details about named companies. HMRC expects intermediaries to give data to the department voluntarily upon request, and has statutory powers to require production of data where necessary.
HMRC uses data from intermediaries to identify cases where there is a risk that the taxpayer has failed to report, or has under-reported, their liability.
Asked by: Lord Leigh of Hurley (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether they treat Amazon as being in the supply chain for VAT purposes in cases where an overseas seller using its full facilities, including warehousing, advertising, taking payment, delivering, customer refunds and questions, evades VAT; and if not, why not.
Answered by Lord Bates
Under EU law, for an online marketplace such as Amazon to be part of a supply chain for VAT purposes, it would need to take ownership of the goods in question and sell them on its own behalf.
At Budget 2016 the government introduced a new provision that allows HMRC to make online marketplaces jointly and severally liable for the unpaid VAT of their non-EU sellers.