>> Fraud or error by sellers on eBay and Amazon is costing the UK up to 1 billion pounds every year in lost value added tax. British officials say the sellers involved are often based in China. Retailers selling in Britain must pay the government 20% VAT from the value of the goods they sell.
But, a UK auditor says Amazon, eBay and others have failed to remove people flouting the rules, even after being informed of their non-compliance. Ebay and Amazon say they're already clamping down on rule breakers. But as Reuter's, Tom Bergin reports, regulators think they're not doing enough.>> According to the report, the consumer watchdog Trading Standards, believes that Amazon and ebay are not doing enough to tackle this problem.
They say that even when they have informed these companies about sellers on the platforms not being VAT registered, and not paying VAT as they should, that the websites eBay and Amazon do not take these people down. So the point being made in the report is that the companies could do more than they have been doing already.
>> The British government are introducing further rules over the coming months, which will make marketplace operators liable for VAT not paid by a seller, and it's not good news for online retailers.>> There could be stronger due diligence requirements, and other measures which could increase the company's overhead costs.
And possibly even curb the amount of activity on the website. So there are additional measures they could take, invariably they're probably going to be bad for Amazon and eBay's business however.>> So bad that Amazon is against a new rule coming next year, under which businesses must perform due diligence checks on their overseas customers.
They say it's disproportionate and ineffective. Whatever the outcome, the online retailers way of operating could change significantly.