- VAT Responsibilities for Sellers: When using an online marketplace to sell goods in the UK, sellers must determine their VAT obligations based on their establishment status. Overseas sellers are required to register for VAT and charge it on sales, while UK-established sellers are responsible for VAT on goods sold within the UK.
- Marketplace’s Role in VAT Collection: The online marketplace is responsible for charging and accounting for VAT on sales, particularly for consignments valued at £135 or less. For goods sold to VAT-registered businesses, the marketplace does not need to charge VAT; instead, the business customer must account for it using the reverse charge procedure.
- Compliance and Penalties: Non-compliance with VAT regulations can result in penalties from HMRC, including being directed to establish a VAT representative in the UK or facing removal from online marketplaces if they fail to register for VAT or provide a valid VAT number.
Importance of This Guidance
Understanding these VAT guidelines is crucial for businesses selling through online marketplaces, as it helps ensure compliance with tax obligations, avoid penalties, and effectively manage VAT on sales transactions.
Find out if you need to pay VAT when you sell goods to customers in the UK using an online marketplace.
