The British Independent Retailers Association (Bira) has written to the Exchequer Secretary to the Treasury, alongside a coalition of 18 business organisations and tax experts, calling for a formal consultation on reforming VAT online marketplace liability rules
The coalition warns that gaps in the current system are being exploited by some overseas sellers using online marketplaces to avoid VAT, allowing them to undercut compliant UK retailers and placing honest British businesses at a structural disadvantage. Independent analysis suggests this VAT loophole could be costing the Exchequer around £700 million a year.
The letter, signed by Bira CEO Andrew Goodacre, urges the government to consider extending VAT online marketplace liability rules so that online marketplaces are responsible for VAT compliance, helping to level the playing field for UK businesses and protect tax revenues.
It adds: ”We understand that concerns have been raised about potential impacts on the smallest sellers, particularly those below the VAT threshold. As organisations that also represent these businesses, we believe any reform can and should be developed in a way that protects small firms from unintended consequences or additional administrative burdens, for example by excluding unregistered businesses.’’
