The Public Accounts Committee has published the evidence submitted to it regarding Amazon and eBay and VAT non-compliance.
I think it's worth a read.
And then some reflection on why the UK has done so little about this, because that cannot be a mistake, but must be policy.
The question is, why doesn't the UK want to collect this tax?
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“The question is, why doesn’t the UK want to collect this tax?”
I guess it’s because they think the value added by having these services to the people are more valuable than the supposed tax being dodged. They need to get their thinking sorted out. After all, apart from lost cost goods, simple transactions and the ability for people to make their own way, what services do these US corporate giants do for anyone? Stump thinking.
Then they should be honest about it: “sell” it in a manifesto, put it openly into law, and operate the law thus made in clear sight of all.
Not have cosy “backroom” deals for the favoured, with erratic and clumsy enforcement for everybody else. What we have now simply brings the rule of law itself into contempt.
This isn’t non-compliance though, is it? It’s tax evasion which Amazon and eBay are facilitating. As of two weeks ago, that’s a corporate criminal offence. Can we expect a prosecution? If not, could we crowdfund a private prosecution?
Let’s see what the PAC says
Their report is out in a week
The reason – so Tories can continue their attack on the welfare system and reducing UK to the small state so beloved of the Tea Party. As far as I can see there is a significant proportion of the Tory party who are the equivalent of the Tea Party but somehow have not got the same MSM attention. Hard Brexiteers who are hoping to turn us into an offshore tax haven are part of it.
It is because most of the old experienced ex Customs and Excise VAT officers have left HMRC and it is now mainly run by ex Inland Revenue people who are clueless about addressing attacks on the VAT system
ANd the IR people are going soon too
Then they’ll be even worse off
“that cannot be a mistake, but must be policy”
Policy or corruption and state capture?
Amazon’s status as a so-called ‘digital disruptor’ reminded me of the recent (current) Uber controversy in London. The Uber controversy has revived disturbing reports about connections between that company and the highest levels of the Tory government.
I am by no means a fan of the Daily Mail but every dog has its day and the day that this report came out was memorable:
http://www.dailymail.co.uk/news/article-4351418/Cameron-aide-s-uber-cover-up.html
It concerns the long-standing friendship between the then PM, Cameron and influential Tory, Rachel Whetstone who was Uber’s head of communications and policy at the time, as well as the pressure that Cameron’s government brought to bear upon Mayor Boris Johnson, so that Transport for London might give Uber an easy ride.
Hmm, my computer seems to have submitted that last comment without me asking it to (?)
Anyhow, for those that are interested, The Guardian has since provided additional detail with this piece:
https://www.theguardian.com/technology/2017/apr/13/data-watchdog-no-10-cameron-uber-correspondence-regulation
The DM has given us the phrase, “chumocracy”:
http://www.dailymail.co.uk/news/…/David-Cameron-s-chum-ocracy-links-Uber-bosses.html
And the Financial Times has weighed in as well:
https://www.ft.com/content/3c5ebc20-1300-11e7-80f4-13e067d5072c?mhq5j=e5
My point is that for civil society activists it is no longer sufficient to assume that these systemic problems can be put down to policy or ideology. The ‘networks’ need to be investigated as a matter of course. If you smell a rat, then chances are there may well be a few rats in there.
I’ve always looked upon the Conservative party as a criminal organisation with a thin political veneer.
There is another way of putting this.
It is the case for better wages and more realistic property prices (lower property debt and lower all round debt)?
People only gravitate towards eBay and Amazon because of the lower prices compared to other places on the high street. It makes their money go further. You can’t blame them really but it is a self destructive cycle in a way.
So, we need to reflate income in my view too.
That’s interesting, Pilgrim,
If what you say is true the Amazon and eBay are what the textbooks would call an “inferior good” (or inferior service): a product that is less preferred, so its sales actually fall when incomes rise.
Is it? Would people be less inclined to use them if incomes rose broadly? I wouldn’t know about Amazon personally because I have bought anything from them, or from eBay for that matter.
I’ll give you a tip about eBay though, I used to be in the antiques and old wares trade and sold some things on eBay but never bought anything off of it — and why? Because it isn’t cheaper. They want you to think that ‘smart shoppers’ buy on eBay. They don’t. Smart sellers sell on eBay, sometimes.
If they can, the smart shoppers go local (especially for small items) where they are not competing against every other bidder in the world.
At any rate none of that matters too much because the blighters should stop dodging taxes anyway.
Correction: ‘I have never bought anything from them’
Ebay gives access to goods which were hitherto difficult to reach. I’ve bought and sold, generally at a loss, many second-hand guitars through Ebay. I’ve been able to learn loads, hands-on, about guitar sounds and construction as a consequence. Couldn’t really have done it with Exchange & Mart 🙂
Marco
I have increasingly used eBay and Amazon since 2010 when I saw a rather steeper than anticipated decline in income. Sometimes eBay is cheaper than Amazon, other times it is more expensive. I am intelligent enough to deduce that I am saving money so I am confident about what I have said. For example I’ve seen new M & S shirt prices go up so I buy second hand ones for work on eBay when I need a new one.
EBay is good for new consumables like vacuum cleaner bags and printer cartridges for example.
My boss who is on some £35K more per year than me gets his stuff from John Lewis. He has never used eBay but still shops at Aldi. I wouldn’t shop at Aldi – I don’t like it but I know plenty of asset rich people who do (hint ,hint).
My director who is on at least £90K more a year than me once confessed to going on eBay to get some second hand designer jeans.
Bottom line for me is that I don’t mind paying premium prices if I have a premium wage and can meet mortgage debt, saving and other spending commitments. That is not the case for me and as much as I would like to use my wages to create some one else’s wages, it is not always possible, which is a pity but there you go. This is what a low wage society looks like in my view and what it does to people’s economic choices and I’m not the only one.
Thanks Richard
I personally find it much harder in terms of jet lag flying east. Can I put a plug in for Progressive Pulse. We have two long articles out this weekend. Charles has a nice one
http://www.progressivepulse.org/economics/is-world-leading-nhs-healthcare-an-affordable-proposition/
There is also one of my own on Brexit
http://www.progressivepulse.org/brexit/will-a-train-crash-brexit-be-good-for-england-in-the-long-term/
Regards
Sean
You can always plug Progressive Pulse…..
Richard,
Given that eBay and second hand goods have come up in this thread I am interested in your thoughts on the idea that 2nd-hand goods (art & antiques included) should not attract VAT because, being sold and re-sold repeatedly the same item can fall prey to double taxation, triple taxation etc.
When traded for profit there is a scheme to ensure that double counting does not arise: it is the second hand margin scheme
It’s been in existence since 1973 (I remember it from way back then) and it works
The margin scheme works for sellers I suppose (for those who don’t know: http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/vat/account-margin.htm )
I was thinking about buyers, the consumer, the broad market. They don’t use normally margin schemes. Over time the same valuable can end up attracting VAT multiple times Anyhow, its not a core issue, just a general point that people sometimes raise vis a vis multiple taxation.
I think the risk is pretty low
On my scales of concern it’s way down the list