Based on the linked source; automatically prepared and checked against the original report.
Policy change
The UK Government’s latest Budget extends online marketplace VAT liability rules from 1 October 2027. Marketplaces will collect VAT on relevant sales made through their sites by certain UK-based businesses. The stated aims are to tackle VAT evasion and support fair competition by reducing the advantage enjoyed by businesses that do not pay tax owed.
Businesses affected
Under the stated rules, marketplaces will collect VAT if a UK business is VAT-registered or has total sales over £90,000 on any platform where it trades. For a business that is not VAT-registered, the source specifies that marketplace collection will not apply when sales are less than £90,000 on each platform. It does not state the treatment of exactly £90,000.
Industry response and guidance
The BHTA welcomes the extension but says implementation must protect disabled people’s relief on essential equipment and avoid unnecessary costs, bureaucracy and cash-flow pressure for responsible retailers. HMRC plans detailed guidance before implementation, including accounting changes. The British Retail Consortium supports consistent VAT collection but says practical, proportionate rules are still needed.
