HMRC is now holding operators of online marketplaces, jointly and severally liable for the unpaid VAT of sellers 
operating through marketplace where:
- a seller operating via the marketplace hasn’t registered for UK VAT
- the operator of the online marketplace, knew or should have known about the breach
These new rules also extend existing rules, so the market operators can be held jointly and severally liable if HMRC tells them that a UK or overseas seller operating via their marketplace is not meeting its VAT obligations.
The new HMRC guidance published on 15 March helps marketplace operators understand:
- how the new legislation will be applied by HMRC
- what information operators need to obtain from sellers, to help them decide if they should be registered for VAT in the UK
- when HMRC will hold operators jointly and severally liable for the unpaid VAT of a seller operating via the marketplace
HMRC define an online marketplace as a website (or any other means by which information is made available over the internet) that anyone – including the online marketplace operator – can use to offer goods for sale.
You are considered to operate an online marketplace if you control access to it, or its contents.
This applies even if the online marketplace:
- isn’t established in the UK
- sells its own goods over the internet
The operator will be considered to be established in the country where the functions of the business’s central administration take place. To work out which country that is you need to consider where:
- essential management decisions are made
- where the registered office is located
- management meetings take place
HMRC’s guidance can be viewed here.
Our VAT experts can assist with helping operators of online marketplaces ensure they are meeting the requirements of UK VAT legislation. Why not give us a call today to discuss how we maybe able to assist you.
