Measure
Online marketplaces will be responsible for collecting VAT on sales by UK VAT-registered businesses and any other (non-VAT registered) UK business with a minimum annual sales threshold per platform of £90,000. The rules will not apply to non-business (i.e. personal) sales, second-hand goods, or business-to-business transactions. HMRC will publish more detailed guidance ahead of implementation in 2027.
Online marketplaces operating in the UK and the UK sellers who trade through them.
The measure takes effect from October 2027 and will be legislated for in Finance Bill 2026/27. The annual sales threshold per platform and further implementation detail, including the precise commencement date, will be set out in secondary legislation to follow in 2027.
The extension of the online marketplace liability deemed reseller rules to address persistent VAT non-compliance of certain sellers trading via online marketplaces is welcome. It is recognised that the 2021 reforms have been broadly effective in relation to overseas sellers, and the extension of these rules to UK sellers who utilise online marketplaces should further support the government’s objectives to minimise non-compliance.
However, a minimum platform threshold (MPT) approach does not solve the core problem that the regime is designed to address: the reliable identification of the seller, their VAT status and the status of their customers. Therefore, an MPT risks creating further governance/resource requirements and processes for online marketplaces, but still creates ambiguity and it is susceptible to fraud.
Furthermore, while we await more guidance, the MPT of £90,000 per platform would appear to mean that UK sellers could trade above the standard VAT registration threshold by operating across multiple platforms. This creates a circular problem whereby sellers who misrepresent their status and/or sales values (e.g., by way of account splitting and/or disaggregation) may gain access to the exemption intended for compliant UK businesses.