UK VAT: Marketplaces & Non-UK Sellers

Online marketplace operators are responsible for VAT on goods sold by overseas businesses. To avoid unpaid VAT, verify if a seller is established outside the UK and keep evidence. HMRC reviews evidence based on business size, internal risk systems, and individual case circumstances.

As an online marketplace operator, you’re liable for VAT on goods located in the UK at the point of sale and sold by overseas businesses through your platform. To avoid HMRC assessing you for unpaid VAT, take reasonable steps to verify if a seller is established outside the UK and keep evidence of these checks.

Deciding Reasonable Checks

HMRC doesn’t specify exact checks. Decide based on:

• Your business size
• Internal risk systems
• Individual case circumstances

Keeping Evidence

Retain records showing you’ve taken reasonable steps to determine the seller’s place of establishment for VAT purposes. HMRC may request this evidence.

How HMRC Reviews Evidence

HMRC will evaluate:

• Steps taken, including risk-specific actions
• Appropriateness, adequacy, and timeliness of steps
• Results of checks and your response to them

Example Checks

These are illustrative checks to determine if a seller is UK-established:

• Verify a UK principal place of business.
• Confirm VAT registration matches the seller’s legal name and details via HMRC’s UK VAT number tool.
• Check for UK address registration at Companies House, if applicable.
• Confirm if directors reside in the UK (e.g., via Companies House).
• Verify UK presence through payment/financial data, such as:
  • UK bank/credit card details
  • UK merchant address on seller’s bank account
  • Financial data from independent payment providers
    • Review credit checks or background checks from third-party sources.
    • Check if the seller’s device uses a UK IP address or other geolocation methods.
    • Confirm the seller uses a UK country code phone number.

If checks suggest the seller isn’t UK-established, conduct further verification.