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HMRC probes VAT import fraud

  • EU VAT
  • 29 August 2018 | Richard Asquith

HMRC probes VAT import fraud

The UK's HMRC has launched a review into non-VAT registered importers of goods into the UK.

It is looking to survey the numbers of businesses bringing goods into the country without a UK VAT registration to help understand if it can reduce the estimated £1.5billion in VAT fraud. Whilst it is not obligatory to have a UK VAT number to settle the import VAT bill, HMRC believes not having a number may indicate onward domestic supplies which do require a UK VAT registration to declare and pay the sales VAT. HMRC has hired an independent research company, IFF Research. It will contact a random sample of VAT unregistered businesses for telephone surveys between August and December 2018.

Other measures the UK has introduced to help reduce VAT fraud in the e-commerce sector include:

  • The Fulfillment House Due Diligence scheme, which requires all
  • Making e-commerce marketplaces jointly and severally liable for unpaid VAT by UK and foreign merchants on their platforms.  This extends the existing liability from non-EU merchants to catch those establishing ‘shell’ companies in the UK.
  • Making e-commerce marketplaces jointly and severally liable to unpaid VAT if a platform knew, or should have known, a merchant should be VAT registered and were not.
  • Marketplaces must check the validity of a merchants VAT number presented on their platforms
  • The government will consider the introduction of split payments, whereby the VAT element of any e-commerce purchase is paid directly to the government


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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.