Value Added Tax Act 1994 section 77F

Exception from liability under section 5A

Section 77F provides a liability cap for online marketplace operators who are deemed to make supplies under section 5A, limiting their VAT exposure where they have taken reasonable steps to verify key facts about the underlying transaction.

• Where an online marketplace operator owes VAT under the deemed supply rules in section 5A, a cap on liability may apply
• The operator is not liable for any VAT in excess of the amount actually paid by the underlying supplier (referred to as "R" in section 5A), provided certain conditions are met
• The operator must have taken all reasonable steps to establish the place of establishment of the person making the taxable supplies and the location of the goods at the time of supply
• The operator must also have taken all other reasonable steps to satisfy itself that the VAT amount charged was correct