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UK HMRC: Marketplaces VAT fraud agreement

  • May 30, 2018 | Richard Asquith

UK HMRC: Marketplaces VAT fraud agreement

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

Need help with your UK VAT compliance?

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.