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UK Budget: marketplace VAT fraud and split payments

  • Nov 21, 2017 | Richard Asquith

UK Budget: marketplace VAT fraud and split payments

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. 

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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 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.