Press Room

March 29, 2018

From the United Kingdom: New Rules Take Effect in the UK to Ensure Online Sellers Pay the Right Tax

Roger Bevan - RBC VAT Limited, a collaborating firm of Andersen Global


In September 2016, the UK became the first country to introduce tough powers to tackle VAT evasion by overseas sellers. This has resulted in the removal of over a thousand non-compliant overseas businesses from selling goods online in the UK and motivated tens of thousands of overseas sellers to register for UK VAT.

The new rules strengthen HM Revenue and Customs’ (HMRC) operational response to online VAT fraud and error from both UK and overseas businesses. They also increase HMRC’s powers to make online marketplaces accountable for VAT fraud committed by online sellers on their platforms.

If sellers - based in the UK or overseas - are not paying the correct VAT when selling in the UK, and are not removed from the site following the issue of a notice by HMRC to the marketplace, HMRC will pursue the marketplaces themselves for any future unpaid tax by those sellers. The rules also make online marketplaces liable for VAT where they knew or should have known that an overseas online seller should have been VAT-registered, but was not.

For more information about how these new rules may affect you or your clients, please click here to download a comprehensive briefing note about this update.