United Kingdom Plans VAT Extension for Domestic Online Marketplaces

• The UK is considering expanding its Deemed Supplier VAT regime so online marketplaces would collect and remit VAT on more domestic seller transactions, not just certain overseas seller sales.
• The reform is expected to be included in the October 28, 2026 Budget and could raise up to £1 billion a year, but the final scope, start date, and treatment of small businesses are still unconfirmed.
• Under current rules, marketplaces generally account for VAT on certain overseas sales; UK-established sellers remain responsible for their own VAT and can use the £90,000 VAT registration threshold.
• The proposal would shift VAT liability for additional domestic marketplace sales from individual sellers to platforms, aiming to reduce VAT fraud and improve consistency.
• HMRC/HM Treasury consulted on safeguards for small businesses, including a minimum platform sales threshold and possible VAT rate relief for sellers below the normal registration threshold.

Source: fiscal-requirements.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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