Amazon has cracked down on tens of thousands of products from overseas sellers who don’t charge or account for VAT.
According to The Times, the online retailer banned thousands of overseas sellers from its platform over the weekend which were thought to be guilty of tax evasion, following a voluntary deal with HMRC.
In the last year an estimated £1.5 billion has been lost in unpaid VAT tax from online sellers, according to the National Audit Office.
Some 60 per cent of these sellers come from China, sending over bulk quantities of products to the UK, where they are sent to warehouses to be distributed.
Amazon has been criticised for carrying out minimal checks on many of these goods, leading sellers to take advantage and avoid paying taxes.
Following the criticism, online retailers like Amazon and Ebay signed a voluntary agreement with HMRC to do more to tackle fraudulent sellers, but other international rivals like China’s Alibaba have refused to sign.
The retailer said it would reinstate the banned sellers if and when they became VAT compliant.
“It should not have taken as long as it has to get where we are,” Retailers Against VAT Abuse Schemes’ Richard Allen said.
“Unlike high-street sales, there is an electronic record of every VAT abuse that has taken place.
“While Amazon has taken a step in the right direction, it needs to make sure that these firms don’t spring up again under different names.
“This illegal scam has already had a devastating effect on small, law-abiding British companies and cannot be allowed to continue.”