Selling online: VAT, platform reporting and the marketplace change in 2027
Marketplaces already report sellers’ earnings to HMRC. From October 2027 they will also collect VAT on sales by UK sellers. What online retailers need to have in order.
Online selling has moved from a side channel to the main route to market for many retailers. The tax rules are catching up. Two changes matter most: the reporting that platforms already do, and the VAT they will soon collect.
What platforms already tell HMRC
A platform that connects sellers with buyers and knows what sellers are paid must collect sellers’ details and report them to HMRC. HMRC can compare those figures with what sellers declare, so sales through every channel need to be in your records.
The October 2027 change
From October 2027, online marketplace VAT rules extend to UK businesses. Marketplaces will be responsible for collecting the VAT on sales made through them by UK VAT-registered businesses, and by other UK businesses selling at least £90,000 a year on that platform. Sales by private individuals, second-hand goods and business-to-business sales are outside the change.
Getting ready
- MapList every channel you sell through, and how each reports and pays you.
- ReconcileMatch marketplace statements to orders, refunds and fees each month.
- PrepareCheck how your accounting software will treat sales where the marketplace accounts for VAT.
- PriceLook at margins by channel, after fees, returns and VAT.
The detail of the 2027 rules is still to be published. We will update this insight when it is.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.