Overseas sellers run the risk of being evicted from online platforms including eBay and Amazon as HM Revenue & Customs continue to take action to recover lost UK VAT revenue.
Since 2016, HMRC has issued almost 5000 joint and several liability notices to online sellers for tax evasion, yielding over £200 million in additional VAT revenue, with figures expected to exceed the £1bn mark in the next 4 years.
Joint and several liability is when two or more persons are fully responsible for any liability; to say, together they are jointly liable to pay the amount of a debt or any damages incurred, based upon an established agreement.
The notices in question affect online sellers based overseas, selling goods stored in the UK to UK customers, or to sellers based outside of the EU, selling goods to UK customers stored elsewhere, and then imported to the UK.
With effect from March 2018 HMRC can seek to recover unpaid VAT from online platforms where they were found to be aware that the overseas seller should have been registered for VAT. This has led to increased checks being carried out by the platforms and sellers who have not complied with their VAT obligations are then evicted from the platform.
Value added tax is one of the most complex and onerous tax regimes imposed on business – meaning some businesses and advisors aren’t always achieving the best results possible – but we can help.
Here at Smith Cooper, our specialist VAT division, is expertly positioned to ensure suitable measures are put in place to protect your liability, whether a UK or an overseas seller.
We can help mitigate the risks associated with trading from overseas and provide commercially viable advice that ranges from compliance issues to more complex commercial transactions.
If you or a client trades to UK customers via online marketplaces, has been issued with a joint and several liability notice and would like further advice, or would like to discuss VAT obligations or issues in general, please get in touch.