MPs to investigate VAT fraud involving Amazon and eBay sellers

An influential committee of MPs is poised to launch an investigation into third-party Amazon and eBay sellers that have avoided paying VAT on products sold in the pre-Christmas period.

HMRC has estimated the VAT fraud has cost taxpayers around £1.5 billion in 2016.

In recent years overseas sellers, notably in China, have come to dominate many popular consumer products categories such as toys, illegally selling goods without VAT.

Conservative MP Richard Bacon, of the public accounts committee, told The Guardian: "I think this is absolutely an issue we need to look at. We’ve already been discussing VAT fraud in online retailing informally and I expect that it is something the committee will want to turn to."

HMRC have seen a rush of VAT registrations in recent months, prompted by the organisation gaining new powers to clamp down on this issue.

The public accounts committee has been effective in the past, having played "a central role in shining a spotlight on other tax scandals involving the likes of Starbucks, Google and Amazon" and helping to "trigger international tax reforms".

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