Guidance

Businesses selling goods in the UK using online marketplaces

Find out your VAT obligations if you use an online marketplace to sell goods in the UK.

• From: HM Revenue & Customs
• Published: 16 September 2016
• Last updated: 23 April 2024 — See all updates

This guidance explains 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 customers
• an overseas seller, or their UK VAT representative, who does one of the following:
  • sells goods already in the UK at the point of sale to UK customers
  • is based outside the UK and sells goods to UK customers, and then imports them into the UK
  • sells goods located in an EU member state to UK customers

There are different rules if your goods are in the EU and sold to customers in Northern Ireland.

Overseas sellers

HMRC defines you as an overseas seller if you sell goods stored in the UK to UK customers 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 UK and sell goods to customers in Great Britain (England, Scotland and Wales), then import them into Great Britain
• the UK and EU and sell goods to customers in Northern Ireland, then import them into Northern Ireland

There are different rules if your goods are in the EU and sold to customers in Northern Ireland.

Online marketplaces

Find out more about:

• HMRC’s definition of an online marketplace
• the legal responsibilities of an online marketplace operator

Registering for VAT

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 £90,000 a year
• an overseas seller and the online marketplace provides you with the VAT details of a business customer
• an overseas seller selling goods located in Northern Ireland at the point of sale, and sold to customers in Northern Ireland
• an overseas seller with goods stored in the EU and your total sales to customers in Northern Ireland are more than £70,000 a year

You can register for VAT online.

You can choose to register for VAT if you want to recover import VAT when importing goods into the UK that will be located in the UK at the point of sale and sold through an online marketplace.

Read Who should register for VAT (VAT Notice 700/1) 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 UK VAT number checker when they verify your VAT registration number.

VAT requirements

Once you’re registered for VAT, you must:

• charge VAT on your UK sales of both standard rate and reduced rate goods
• account for, and pay that VAT to HMRC

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

If you do not meet VAT requirements

HMRC is committed to helping you meet 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 do not 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 do not 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 meeting 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 you 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 the EU and you do not register when your total sales to customers in Northern Ireland are more than £70,000 a year.

UK VAT representatives of overseas sellers

If you’re the UK VAT representative of an overseas seller that is not meeting 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 an 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 and more information

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

VAT and goods returned to you

Read the VAT and overseas goods sent to the UK and returned to the seller guidance to find out how to deal with VAT if you have sold goods sent from abroad to customers in the UK and they are returned to you.

Published 16 September 2016
Last updated 23 April 2024 + show all updates

1. 23 April 2024

   The VAT threshold has increased from £85,000 a year to £90,000 a year.

2. 3 January 2024

   Link to the VAT 1 form in the section 'Registering for VAT' has been removed.

3. 31 December 2020

   Guide updated with more information on seller VAT obligations from 1 January 2021. Chinese translation also removed.

4. 31 July 2018

   VAT registration section updated to include how to register for VAT.

5. 13 April 2018

   A Chinese translation of the guidance has been added.

6. 15 March 2018

   Updated with changes announced in the Autumn 2017 Budget for sellers that use online marketplaces.

7. 22 February 2017

   A Chinese version of this webpage is available

8. 16 September 2016

   First published.