On 15 March 2018, section 38, Finance Act 2018, came into force. This provision amends the Value Added Tax Act 1994, in the case of goods sold through online platforms such as eBay, Amazon and Gumtree.

The effect of the amendments is that if operators of a platform knew or “ought to have known” that a non-UK seller was not accounting for VAT, and does not act, HMRC will have the power to treat both the seller and the operator as jointly and severally liable for any under declaration of VAT.

The new rules place additional requirements on operators of online platforms to undertake due diligence checks on their sellers. If HMRC identify any seller on an online marketplace that has not met their VAT requirements, they will issue the operator with a “joint and several liability” notice. The operator will then usually have 30 days to stop the seller from offering goods for sale in the UK on the marketplace.

A copy of HMRC’s Guidance on the checks an online marketplace operator must carry out is available to view here.

For further details of the new rules, readers are referred to our article published on 30 April 2018, which is available to view here.