Web Robot to seek out VAT fraud
Search engine could bring in extra £1m tax
HM Revenue and Customs (HMRC) has developed Web Robot, an advanced search engine designed to track down online VAT evasion.
Web Robot cost £250,000 and became fully operational in March. HMRC estimates the system will allow it to collect an extra £1m a year in tax.
The software, developed in conjunction with the Dutch tax authority, helps to identify internet businesses obliged to register for VAT. A number of overseas tax authorities have expressed an interest in using the system.
Sir John Bourn, head of government watchdog the National Audit Office (NAO), said in a report last week that HMRC collected £1bn in VAT on ecommerce last year.
Tax evaders include suppliers deliberately structuring their businesses to take advantage of the UK exemption for goods worth less than £18 from outside the EU, or those understating the value of the goods.
VAT is chargeable on services supplied online from outside the EU and the authorities have succeeded in collecting £59m in VAT from overseas companies supplying the UK market.
The NAO reportidentified failure to register for VAT as one of the main areas where Web Robot will operate.
HMRC also intends to examine the evidence discovered by the search engine to investigate if other taxes on income are being evaded.
Further reading: