Value Added Tax Act 1994 section 5A

Supplies of goods facilitated by online marketplaces: deemed supply

Section 5A makes online marketplace operators responsible for accounting for VAT on certain sales made through their platforms, by treating the operator as having made the supply to the end customer.

• When goods are sold through an online marketplace and either the goods are imported in consignments worth £135 or less, or the seller is based outside the UK, the marketplace operator is deemed to have made the supply to the customer and must account for VAT
• The original seller is treated as having supplied the goods to the marketplace operator (a deemed business-to-business supply), and the operator is then treated as having supplied the goods onward to the end customer
• The deemed supply rules do not apply where the overseas seller is selling goods already in the UK to a VAT-registered customer who has provided their VAT registration number to the marketplace operator, and the operator has passed that number and supply details to the seller within 7 days of the supply
• The imported consignment condition does not cover goods subject to excise duty or consignments where an overseas postal operator has agreed with HMRC to account for import VAT