Charging VAT when goods are sold if you're an online marketplace operator
Source: gov.uk (2025-06-20)

Find out how to work out what VAT to charge when goods are sold if you’re an online marketplace operator.

As an online marketplace operator you may need to charge VAT on sales of goods you facilitate.

This depends on:
- the place of establishment of the seller
- where the goods are at the point of sale
- the value of the consignment they are imported in
Online marketplaces

HMRC’s definition of an online marketplace is a business:
- using a website or mobile phone app (such as a platform or portal)
- whose platform allows third parties to offer goods for sale to customers
The business must also be involved in all of these activities:
- setting any terms or conditions on the sale of the goods to the customer
- processing or enabling customer payments
- ordering or delivery of the goods
When a business is not an online marketplace

A business is not an online marketplace if it only provides one of these services:

1). Processing of payments for the sale of the goods to the customer. 2). Listing or advertisement of goods. 3). Redirecting or transferring customers to other websites or apps that offer goods for sale. There’s no further involvement in any sale that might take place on that website or app following redirection or transfer.

Check if the goods are being sold by an overseas seller or a seller established in the UK for VAT purposes

The seller is an overseas seller if they do not have a UK business establishment and they sell goods to customers in the UK.

Check if UK business establishment exists

A UK business establishment exists if either of the following conditions are met:

a). A business establishment is in the UK and is the place where:
- essential management decisions are made
- the business’s central administration is carried out
b). A business has a fixed establishment in the UK. This is a permanent physical presence with the human and technical resources to make or receive taxable sales.

Consider if the seller is genuinely established in the UK

The business establishment is the place where the business is run from. This is usually the head office or headquarters.

The business must have a real presence in the UK for a fixed establishment to exist. It must be genuinely operating from the UK.

Any of the following criteria are unlikely to be sufficient by themselves to demonstrate UK establishment. For example, if a business:
- is incorporated in the UK
- has a registered, serviced or virtual office
- has an address in the business name
Find out how you can get evidence to confirm a seller’s place of establishment (https://www.gov.uk/guidance/check-where-an-online-marketplace-seller-is-established) to avoid being liable for under-declared VAT.

Goods in the UK at the point of sale

You will be liable for VAT on goods sold by overseas sellers and need to charge this when the goods are sold. If the seller is established in the UK, they will be liable for VAT.

To charge and account for VAT you will need to:
- know the precise nature of the goods to find out the correct rate of VAT (https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services) to charge
- register for VAT (https://www.gov.uk/register-for-vat) in the UK
- keep records of the goods sold (https://www.gov.uk/charge-reclaim-record-vat/keeping-vat-records), and make sure they get accurate information to apply the correct VAT treatment to the goods (https://www.gov.uk/guidance/vat-and-overseas-goods-sold-to-customers-in-the-uk-using-online-marketplaces)
You will be held liable for under-declared VAT if you cannot show you have taken reasonable steps to make sure the correct VAT was charged.

Where the goods are located in Northern Ireland at the point of sale and sold to a customer in Northern Ireland if the seller is:
- not established in the UK or EU, you will be liable for the VAT
- established in the UK or EU, they will be liable for any VAT due
Goods sold to UK VAT registered businesses

You should pass on all the details of the sale (which should include the VAT registration number of the business) to the seller. The seller will need to charge and account for any VAT due.

Goods that are outside of the UK at the point of sale

You must work out the consignment value of the goods by deciding their ‘intrinsic value’. This is the price the goods were sold for, not including:
- transport or insurance costs, unless they are included in the price and not separately shown on the invoice
- other identifiable taxes and charges
You must add the individual values of all items in a consignment together to get the total value of the consignment, unless sent individually.

Consignments valued at £135 or less

You will be liable for VAT and need to charge this when the goods are sold.

To charge and account for VAT you will need to:
- know the precise nature of the goods to find out the correct rate of VAT (https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services) to charge
- register for VAT (https://www.gov.uk/register-for-vat) in the UK
- keep records of the goods sold (https://www.gov.uk/guidance/vat-and-overseas-goods-sold-to-customers-in-the-uk-using-online-marketplaces), and make sure you get accurate information to apply the correct VAT treatment to the goods
You will be held liable for under-declared VAT if you cannot show you have taken reasonable steps to make sure the correct VAT was charged.

Goods valued at £135 or less sold to UK VAT registered businesses

You will not need to charge and account for VAT if the customer is a VAT registered business. The VAT registered business customer will be required to account for any VAT due instead.

You should:

Ask for their VAT number.

Confirm it is correct — use the check a VAT number online service (https://www.gov.uk/check-uk-vat-number).

Add a note to the invoice (for example, by writing ‘reverse charge: customer to account for VAT to HMRC’).

Send it to the business customer.

VAT registered businesses receiving goods valued at £135 or less bought on an online marketplace

If the goods are sold to a business customer in Great Britain (England, Scotland and Wales), the business receiving goods should account for the VAT on their VAT return using a ‘reverse charge’ procedure.

If the goods are sold to a business customer in Northern Ireland from outside the EU, the business receiving goods may account for it using postponed VAT accounting (https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat) or any other means of paying import VAT.

Wherever the goods are sold to the business customer they will be able to recover the VAT as input tax on the same VAT Return subject to the normal recovery rules.

Consignments valued at more than £135

If the total value of the consignment is more than £135, normal import VAT and customs rules (https://www.gov.uk/goods-sent-from-abroad) will apply.

If the seller makes changes to the consignment so that its total value goes above £135:
- the consignment may be subject to import VAT and Customs Duty
- you may have to adjust the VAT already accounted for at the point of sale (https://www.gov.uk/guidance/how-to-correct-vat-errors-and-make-adjustments-or-claims-vat-notice-70045)
After you’ve registered for VAT

VAT invoices

The normal rules for the content and format of VAT invoices will apply.

You must issue a paper or digital VAT invoice to customers as specified in the VAT guide.

For goods sold in Northern Ireland from outside of the EU, you do not need to provide a VAT invoice.

VAT records

You must keep full records (including VAT invoices) for 6 years from the date any goods are sold.

Find out more about VAT record keeping (https://www.gov.uk/vat-record-keeping).

Compliance checks

HMRC carries out compliance checks to:
- make sure you’re paying the right amount of tax at the right time
- make sure you’re getting the right allowances and tax reliefs
- prevent tax evasion
- make sure the tax system is operating fairly
Correcting errors

If you make an error in your VAT records or on your VAT return read Correct errors in your VAT return (https://www.gov.uk/submit-vat-return/correct-errors-in-your-vat-return).