Amazon and eBay must be responsible for dodgy dealers, says Osborne

Budget sees rules tightened

While you've been busy working out how your savings and shopping bills are going to be affected by today's Budget, executives at Amazon and eBay have been worrying about dodgy dealers using their online marketplaces to get around the UK's VAT rules.

Specifically: sellers based outside Europe and holding stock in the UK but not registering a VAT number. It may not mean much to most casual eBayers but it makes it tough for genuine small sellers from this country (who do follow the rules) to compete on price.

Now George Osborne has said Amazon and eBay will be liable for anyone on their sites who's breaking the rules - so the onus is on the companies to root out these types of traders, otherwise they might find themselves having to pay out all the VAT that's owed.

The taxman cometh

"Sites like Ebay and Amazon have provided an incredible platform for many new small British startups to reach large numbers of customers," George said in the House of Commons today, as The Register reports. "But there's been a big rise in overseas suppliers storing goods in Britain and selling them online without paying VAT."

The government is going to give HMRC stronger powers to chase up overseas businesses who aren't playing by the rules. If Amazon and eBay don't do enough to help solve the problem, they might find themselves with a rather hefty bill to pay, although exactly how much of an effort HMRC will expect the online marketplaces to make remains to be seen.

An eBay spokesman told The Register that the company already chases up those who flout the official guidelines. "We welcome rules that ensure a fair marketplace and will review the detail of the legislation," he said. "Even without such a law, we would not hesitate to suspend sellers found by HMRC to be evading VAT."