UK HMRC: Marketplaces VAT fraud agreement

Thu 31st May 2018

The UK’s HMRC has confirmed the first online marketplaces to sign-up to its e-commerce data exchange agreement. They are: Amazon; eBay; and Fruugo.

The agreement aims to improve HMRC’s detection of e-retailers failing to properly register and declare VAT for their online sales. HMRC believe this could add up to £1.5billion in missed VAT collections.

So far, Tesco’s marketplace is yet to sign-up. Tesco did recently indicate that it would close its marketplace, Tesco Direct, in July. Alibaba is believed to be in discussion with HMRC. The other major missing UK marketplaces are: etsy; Flubit; OnBuy; game.

HMRC Agreement commitments

The agreement is intended to foster a collaborative relationship between HMRC and online marketplaces to promote VAT compliance by users of the marketplaces which is underpinned by a set of legal obligations on the online marketplaces and a set of legal powers of HMRC. It covers the following areas:

  • Provision of data of marketplaces’ Sellers, their transactions and VAT status;
  • Education for Sellers of the VAT obligations, including the requirement of foreign Sellers to UK VAT register
  • Excluding Sellers when HMRC informs the participating marketplaces of potential VAT fraud or non-compliance

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