In a move aimed at creating more checks on businesses which trade online, HMRC is in the final stage of a deal with companies like Amazon and eBay.

How might this affect your business?

Online targets

Businesses which trade online are increasingly in HMRC’s firing line as targets of potential tax avoidance.

However, it accepts that, while not setting out to avoid tax, businesses might accidentally overlook VAT rules.

That’s why it’s in the throws of agreeing an arrangement to help or penalise businesses which aren’t complying.



Online marketplace companies which sign up to the agreement commit to providing data to HMRC about businesses which use their websites to sell, but only if they receive a request from HMRC.

Marketplace systems

Online marketplaces will create systems to take action if HMRC shows evidence of potential non-compliance with VAT obligations.

The action might be as simple as asking for your VAT registration number, but it could be more intrusive.

For example contacting you for clarification, within 30 days, of how you deal with VAT for your Internet sales; and if you don’t respond satisfactorily, or HMRC presents evidence to the marketplace company of VAT non-compliance, it will implement sanctions such as blocking your use of the platform to sell in the UK.


No names mentioned

As yet there are no names of the companies which are likely to sign up to the agreement. We’ll let you know when they are published.

Tip. If you receive a request from an online marketplace company about how you handle VAT on sales, it means that HMRC already has your business in its sights.

Therefore, review your systems and make changes if necessary so that you comply with VAT rules.

Marketplace companies have agreed to include VAT guidance on their websites; this would be a good place to find information about what you should be doing.



If you receive a request from an online marketplace company about how you deal with VAT, HMRC is already checking on you.

Take immediate steps to review your online trading to ensure compliance with the VAT rules.


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