UK Budget: marketplace VAT fraud and split payments
- Nov 21, 2017 | Richard Asquith
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
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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.