UK Budget: marketplace VAT fraud and split payments

Wed 22nd Nov 2017

The UK Chancellor, Phillip Hammond, today announced in the Autumn Budget a range of measures to combat an estimated £1.5bn in online VAT fraud

The measures from Spring 2018 include:

  • The fulfillment house due diligence scheme that requires warehouses storing goods to perform proper due diligence on the goods they fulfil and their overseas clients.
  • Making e-commerce marketplaces jointly and severally liable for unpaid VAT by UK and foreign merchants on their platforms.  This extends the existing liability from non-EU merchants to catch those establishing ‘shell’ companies in the UK.
  • Making e-commerce marketplaces jointly and severally liable to unpaid VAT if a platform knew, or should have known, a merchant should be VAT registered and were not.
  • Marketplaces must check the validity of a merchants VAT number presented on their platforms
  • The government will consider the introduction of split payments, whereby the VAT element of any e-commerce purchase is paid directly to the government

Click for free British VAT info