Source · Select Committees · Public Accounts Committee
9th Report - Tax evasion in the retail sector
Public Accounts Committee
HC 355
Published 12 February 2025
Recommendations
8
Accepted in Part
HMRC significantly underestimated additional tax revenue from online marketplace VAT liability legislation.
Recommendation
In January 2021 government introduced legislation making online marketplaces liable for VAT from overseas sellers, resulting in £1.5 billion of additional tax a year. This is five times greater than HMRC estimated at the time.15 We asked HMRC why this …
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Government Response Summary
HMRC will analyze the difference between original and current costings of the 2021 Online Marketplace Liability policy, and update its estimate of tax lost from VAT non-compliance, providing findings when sufficiently robust, with an update in September 2025 and a final report in April 2026; however, they may not be able to identify all the specific elements requested.
HM Treasury
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