£1.5bn lost tax from online VAT fraud

Today’s National Audit Office report shows that HMRC's prolonged failure to collect the right amount of VAT from online sellers outside the EU resulted in lost tax revenue of up to £1.5 billion in 2015-16.

This is a double whammy for taxpayers. Overseas sellers who avoid VAT undercut the prices charged by small, law abiding British businesses hitting British jobs. Add to that the billions in lost tax which could be spent on health, education and other vital services and no-one wins except the VAT avoiders.

I am very concerned that this undermines the competitiveness of British businesses at a time, post Brexit, when the UK's economy needs all the support it can get to compete outside the EU.

HMRC's new powers to tackle online VAT fraud are a start, but it must finally step up and act to confront this growing problem.

You can read the National Audit Office’s report in full here.