HighUKAmazon

UK VAT Joint Liability for Online Marketplaces

UK government made online marketplaces jointly liable for unpaid VAT from non-UK sellers.

What Happened

The UK government extended deemed supplier rules under VAT (Amendment) Regulations 2023, making online marketplaces like Amazon jointly and severally liable for unpaid VAT from non-UK sellers. Amazon updated seller requirements to enforce VAT registration compliance. Sellers without proper registration faced account suspension and HMRC penalties up to 100% of underpaid tax.

When

Effective January 2024, enforcement tightened April 2024

Cause

Non-UK sellers were selling to UK consumers without registering for VAT or remitting collected VAT to HMRC.

Resolution

1Register for UK VAT through HMRC online portal
2Appoint a UK VAT agent if non-UK resident
3Provide valid VAT number to Amazon seller account
4File quarterly VAT returns on time
5Ensure VAT-inclusive pricing on all UK listings

Timeline

Confirm timing with the operator or competent authority 2-4 weeks

Cost

200-500 GBP for VAT registration + agent fees + penalties up to 100% of underpaid tax

Lessons Learned

•HMRC can pursue sellers directly AND hold platforms accountable
•VAT registration is required before making any sales to UK consumers
•Penalties for non-compliance can reach 100% of the underpaid tax amount

Prevention

✓Register for UK VAT before making first sale to UK consumers
✓Use VAT registration checker to determine if registration is required
✓Set up automated VAT return filing reminders