VAT—online marketplaces and direct online sales of goods

The following Tax practice note provides comprehensive and up to date legal information covering:

  • VAT—online marketplaces and direct online sales of goods
  • VAT definition of an online marketplace
  • VAT liability of online marketplaces and non-UK sellers
  • Low-value consignments
  • Online marketplaces
  • Direct sales by non-UK sellers
  • The reverse charge on sales to business customers
  • UK-based goods sold through online marketplaces
  • Joint and several liability of online marketplaces
  • Online marketplaces—obligation to display the seller’s UK VAT number
  • More...

VAT—online marketplaces and direct online sales of goods

This Practice Note is about the VAT rules affecting sales of goods online to UK customers, whether the sale is made through an online marketplace or directly. It considers:

  1. the rules under which online marketplaces or non-UK sellers can be directly liable for UK domestic VAT (as opposed to import VAT) on sales to UK customers—these are relevant where the goods are either:

    1. worth no more than £135, or

    2. already in the UK at the time of sale, and

  2. the rules under which HMRC can impose joint and several liability on operators of online marketplaces for VAT that should have been paid by sellers of goods operating on those marketplaces

This Practice Note does not consider the position for goods imported into Northern Ireland from the EU. These are the subject of a special regime contained in the Northern Ireland Protocol. For more details, see Practice Note: VAT—Northern Ireland—buying goods in the EU [Archived].

VAT definition of an online marketplace

An online marketplace is defined for VAT purposes as a website, or any other internet presence such as a mobile phone app, which facilitates the sale of goods by persons other than the operator (whether or not the operator also sells goods through the marketplace).

A business will only be classed as an online marketplace if it is involved in all

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