Learn what you must do to meet your UK VAT responsibilities if you sell goods in the UK on an online marketplace and are either:

• a UK seller selling goods already in the UK at the point of sale to UK consumers
• an overseas seller, or their UK VAT representative, who either:
  • sells goods already in the UK at the point of sale to UK consumers
  • is based outside the EU and sells goods to a UK consumer, and then imports them into the UK
  • sells goods located in another EU member state to UK consumers

There are different VAT rules for overseas sellers based in the EU who sell goods in the UK, that are not in the UK at the point of sale.

Overseas sellers

HMRC defines you as an overseas seller if you sell goods stored in the UK to UK consumers and do not have a business establishment in the UK.

You’ll be established in the country where the functions of your business’s central administration take place.

To work out where that is you should consider where:

• essential management decisions are made
• your registered office is located
• management meetings take place

You’re also an overseas seller if you’re based outside the EU and sell goods to a UK consumer, then import them into the UK.

If the UK leaves the EU without a deal you must pay import VAT if all the following apply:

• you are based outside the UK
• you sell parcels to UK buyers worth £135 or less
• the goods you sell are located outside the UK

More information is available on GOV.UK about import VAT on parcels.

Online marketplaces

HMRC defines 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.

This applies even if the online marketplace:

• is not established in the UK
• sells its own goods over the internet

An online marketplace operator can be held liable:

• for an online seller’s unpaid VAT
• if an online seller does not meet its VAT requirements

You operate an online marketplace if you control access to it, or its contents.

VAT registration

You must register for VAT in the UK if you’re:

• a UK seller selling goods as a business activity in the UK, and your business’s VAT taxable turnover is more than £85,000 a year. Register online or by post using a VAT1
• an overseas seller selling goods as a business activity where those goods are located in the UK at the point of sale, or where the goods are sold to a UK customer and then imported into the UK by the seller (there is no threshold). Register online or by post using a VAT1
• selling goods as a business activity that are in another EU member state (known as ‘distance selling’) and your sales to UK consumers are more than £70,000 a year. Register by post using a VAT1A

Read Notice 700/1: should I be registered for VAT? if you need more information to help you decide if you should register for VAT.

After you’ve registered for VAT you’ll get a VAT registration number from HMRC. You should give it to every online marketplace where you offer goods for sale in the UK, so they can check it and display it on their website.

You should use the same business name that you used when you registered for VAT when you open a trading account on an online marketplace.

The online marketplace may remove you from their marketplace if you do not, as they will not be able to match your trading account name with the name on the EU Europa database when they verify your VAT registration number.

VAT requirements

Once you’re registered for VAT, you must:

• charge VAT on your UK sales of standard-rated goods
• account for, and pay that VAT to HMRC

You can find more information on how to account for the VAT you owe in VAT Notice 700/12: how to fill in and submit your VAT Return.

Failure to meet VAT requirements

HMRC is committed to helping you comply with VAT rules.

We’ll identify high risk sellers who are not meeting UK VAT requirements. This includes, but is not limited to, failing to:

• register for VAT in the UK
• supply accurate VAT returns for sales in the UK
• pay the full liability arising from sales in the UK

HMRC will contact you to ask what action you intend to take and can register you for VAT if you do not.

What we do after this will depend if you’re:

• a UK seller
• an overseas seller
• a UK VAT representative of an overseas seller

UK sellers who fail to meet VAT requirements

HMRC may impose a penalty on you.

HMRC can also contact the online marketplaces you trade through, to inform them that you are not complying with the VAT rules. They may decide to remove you from their marketplace.

Overseas sellers who fail to meet VAT requirements

As well as the normal penalties HMRC can impose on you, they may also consider:

• directing you to appoint a VAT representative established in the UK
• asking you for a suitable security

If you still do not comply, HMRC can contact the online marketplaces you trade through to inform them that you are not complying with the VAT rules. They may decide to remove you from their marketplace.

Online marketplaces can also remove you from their marketplaces if:

• they know that you must be registered for VAT and have not done so
• you have not given them a valid VAT registration number for your business

HMRC can register you for VAT and impose a penalty if you’re an overseas seller with goods stored in another EU member state and you do not register when your UK turnover exceeds £70,000 a year.

UK VAT representatives of overseas sellers

If you’re the UK VAT representative of an overseas seller failing to meet its UK VAT requirements HMRC can hold you jointly and severally liable for the VAT it owes from the date you become its representative.

You may also have to give a suitable security to HMRC.

Appeals

There are some differences to the general appeals guidance on what to do if you disagree with a tax decision.

UK sellers

You can appeal against:

• having to register for VAT
• an assessment for VAT

Overseas sellers

You can appeal against:

• having to register for VAT
• an assessment for VAT
• having to pay a security

You cannot appeal against a direction to appoint a UK VAT representative.

Overseas sellers with goods stored in another EU member state

You can appeal against:

• having to register for VAT
• an assessment for VAT

You cannot appeal against a direction to appoint a UK VAT representative.

UK VAT representatives of overseas sellers

You can appeal against a requirement to provide a security.

You cannot appeal against being made jointly and severally liable for an overseas seller’s VAT obligations.

Get help

Find out more about online and distance selling for businesses or phone the VAT helpline.