VAT News

Online marketplaces: HMRC publish co-operation agreement


HMRC have asked online marketplaces operating in the UK to sign an agreement to help tackle online VAT fraud on their platforms. The expectation is that information will be provided voluntarily and HMRC will name those marketplaces that comply with the agreement.  The agreement will help platforms meet their responsibility to ensure their sellers understand the tax rules, and prevent fraud taking place on their watch.

Under the agreement, a marketplace would agree to provide HMRC with data about online traders in bulk, and not just on a case by case basis. The intention that the data will be provided voluntarily, without HMRC having to resort to formal information notices may look a little weak in terms of HMRC’s powers but this is meant to be a collaborative agreement so while there appears to be no ‘carrot’ equally on the face of it neither is there any ‘stick’. That said while it is recognised that the agreement is not legally binding, it will operate alongside HMRC’s existing powers to counter fraud by online traders (e.g. the issue of joint and several liability notices) so marketplaces will be aware of this. 

To assist HMRC in tackling online VAT fraud and error, the agreement asks online marketplaces to commit 

  • educating online sellers from the UK and abroad about their VAT obligations in the UK either via their own help and support or by directing them to HMRC’s website
  • responding swiftly when notified by HMRC that sellers are not playing by the VAT rules, and setting up a system to take appropriate action
  • finding a suitable and lawful way to provide HMRC with information about their sellers, when requested

If you would like to discuss anything in connection with this matter please contact Andrew Norris on 01633 415390.   For more detail please see HMRC’s News story HERE and read HMRC’s guidance on the agreement HERE

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