The UK may extend the Deemed Supplier model to all online marketplace sellers, impacting VAT collection. Proposed changes eliminate the VAT threshold, risking business viability and causing price inflation. The new model complicates VAT compliance while favouring larger platforms, potentially reducing competition and consumer choice. Careful consideration of these consequences is essential before... Read more

HMRC requires digital platforms linking buyers and sellers for goods/services to register, even if no sellers need reporting. Sellers earning under £1,700 from fewer than 30 sales are exempt. According to HMRC, if an app or website links buyers and sellers to proviFde goods or services, it will be included in this category. Furthermore, the platform needs to store or readily compute the amount pa... Read more

HMRC has digitalized its VAT error correction process, replacing form VAT652 with an online system for improved efficiency. Errors under £10,000 or between £10,000 and £50,000 (less than 1% of total sales) can be adjusted in VAT returns. Exceeding thresholds must be reported directly to HMRC. Businesses use Government Gateway credentials for online corrections, while VAT-exempt businesses may noti... Read more

In certain situations, customers must account for VAT due, such as purchasing services from overseas suppliers, deregistering goods with claimed input tax, applying the domestic reverse charge (DRC), and supplying mobile phones/computer chips. Failure to do so can result in HMRC penalties and interest. Simple accounting entries can resolve these issues, but accurate recording is crucial for avoidi... Read more

VAT is a UK tax on goods and services, with rates ranging from 20% to 0%. Businesses must register if their taxable turnover exceeds £90,000 in the past 12 months, acquire a VAT-registered business as a going concern, or purchase goods or services VAT-free from non-UK countries. Exceptions include unregistered supplies, zero-rated supplies, and exempt supplies. Businesses must maintain accurate VA... Read more

On 29 September 2025, UK Chancellor Rachel Reeves reaffirmed no increase to the standard 20% VAT rate, per the 2024 election manifesto. However, the 26 November 2025 budget may raise funds by adjusting zero-rated or 5% VAT rates, potentially cutting the £90,000 VAT registration threshold, reducing domestic fuel VAT from 5% to 0%, or imposing VAT on private taxi/ride-sharing platforms. VAT Exemptio... Read more