VAT: Evasion

Lord Davies of Oldham Excerpts

Monday 20th November 2017 Lords Chamber

[Lord Bates]

The noble Lord is absolutely right to say that there is a big change from traditional sorts of trading to online trading. It is therefore essential that HMRC tracks that in moving towards making tax digital. That is what we are trying to do. We are also saying that fulfilment houses, which are a device used to store goods for onward selling in the UK, will need to register from April next year. Perhaps most relevant to the point that he raises, we are also looking at the idea of having split taxation so that, rather than going through the declaration element, the minute that a transaction is triggered online, the tax immediately goes to the Exchequer. That seems a more sensible way forward. We consulted on that and will come forward with our proposals on it very shortly.

[Lord Davies of Oldham (Lab)]

My Lords, as the noble Lord, Lord Lucas, has clearly exposed, the Government have been somewhat tardy in dealing with this issue—as they have been on so many issues which involve the multinationals. Will the Minister recognise that legislative time is no excuse as the Government introduce a Finance Bill every year in which they could, and should, address these significant issues? Does he appreciate that the Government ought to have a comprehensive plan to restore transparency to our tax system—which is what a future Labour Government will deliver?

[Lord Bates]

Before we wait for the future one, we might reflect on what the last one did or did not do in this area. The truth is that these are fast-moving instruments; people are arbitraging the system and looking at how to exploit advantages from a trading point of view. HMRC has been vigilant and has come forward with ideas—and when it does, we implement them. That is why we put them forward in the Finance Bill and are bringing forward the measures we are talking about. That is also why the 75 measures on tax evasion and avoidance that we have introduced since 2010 have raised £160 billion for public services.