Over the past few years we have written several times about the VAT legislation effecting Amazon and eBay traders selling in the UK. In 2017, Amazon began suspending the accounts of traders who could not prove VAT compliance and in the middle of 2018, we reported that eBay representatives had begun making phone calls to users threatening closure of non-VAT registered accounts. In 2018 a report by the Public Accounts Committee of MPs said that up to £1.5bn was lost from third-party sellers on online marketplaces not charging VAT on the sales that they made in the UK.
According to the BBC, HMRC announced earlier this year that they have red-flagged 4,600 sellers who were not VAT registered on online platforms in the UK. HMRC are now sending notices to online seller’s sites if they find businesses there that have failed to pay the correct VAT. Seven hosting sites, including Amazon, eBay, Asos and Etsy, have subsequently signed up to an agreement with HMRC stating that they can be pursued for unpaid VAT if they fail to act regarding non-compliance.
HMRC have recouped about £200m in VAT after online sellers have registered to pay VAT following the receipt of such alerts, and the number of applications for VAT registration have risen to 58,000 from 2017 to 2018 compared to 1,650 applications between 2015 and 2016.
At FKGB Accounting we specialise in helping overseas traders do business in the UK. We have assisted with the VAT compliance of many Amazon and eBay traders. Contact us to find out how we can help.
