Recommendation 22

When businesses register for VAT, HMRC does not verify whether they are UK–established in most cases.65 HMRC explained all VAT registrations are risk assessed and that just over 50% of VAT registrations require further checks which can, but do not routinely, include address validation.66 HMRC told us that is has confidence that its VAT register, combined with due diligence rules for online marketplaces, are working well, although it acknowledged that overseas retailers selling through online marketplaces was a compliance risk which it must constantly monitor.67