Where VAT returns submitted by overseas online marketplace traders do not match up with information that HMRC holds on that trader, HMRC currently asks the trader for further information.
From September 2022, HMRC will send out a VAT assessment instead. HMRC believes that it already holds the right information to raise an assessment without relying on the trader to provide this.
Assessments will cover VAT returns for periods up until December 2020. VAT rules for overseas sellers who operate on online marketplaces changed on 1 January 2021.
The assessment will be subject to statutory review and appeals rights. It will be sent to the trader’s registered UK address. This address may be the trader’s agent’s address.
HMRC will work with traders that struggle to pay an assessment to arrange a time-to-pay agreement. If traders do not pay an assessment or agree time to pay, HMRC will issue a joint and several liability notice to the hosts of the online platform(s) that the trader trades from.
The online platform can then act as necessary to protect itself from being pursued by HMRC for the trader’s VAT debts. This may include stopping the traders from selling on its website. If this happens, the trader will not be able to trade on the marketplace until HMRC withdraws the joint and several liability notice.
HMRC recommends that overseas traders and their agents take action to correct possible errors on VAT returns they have already submitted, before they receive an assessment. For more information on how to do this, see: How to correct VAT errors and make adjustments.
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