Sellers red-flagged for paying incorrect tax

More than 4 600 online sellers have been red-flagged to marketplaces for tax evasion during the past two years according to HMRC. As a result many sellers have had their online stores deleted.

The red flags known as joint and several liability (JSL) notices were introduced in 2016 to protect British businesses being undercut by overseas sellers evading VAT.

HMRC sends notices to online marketplaces when it finds a seller on the platform not paying the correct VAT. If the seller is not removed from the site the marketplace will be pursued for any future unpaid VAT by those sellers.

During the same period the number of applications for VAT registration by overseas businesses grew to 58 000. This...