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UK anti-VAT fraud split payments on e-commerce

  • Mar 7, 2017 | Richard Asquith

UK anti-VAT fraud split payments on e-commerce

The UK’s Chancellor has announced in today’s budget a public consultation on introducing anti-VAT fraud spilt payments on B2C e-commerce.

The mechanism would work by UK consumers automatically paying the VAT element of any online purchase from overseas sellers directly to HMRC.  This would aim to eliminate the growing problem of VAT fraud by non-EU online sellers, especially from China.  This has been estimated to cost the UK up to £2 billion per annum.

A similar measure has been used in Italy for government business with some success.

In 2016, the UK introduced a range of measure to stem the problem of non-EU sellers failing to VAT register and charge the correct VAT rates.  These included making online market platforms potentially liable to any missing VAT.

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Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.