ICAEW.com works better with JavaScript enabled.


VAT assessments change for overseas online marketplace traders


Published: 26 Jul 2022 Update History

ICAEW’s Tax Faculty understands that HMRC is changing the way it carries out VAT assessments for overseas online marketplace traders that have submitted inaccurate returns.

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.

Tax Faculty

This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwireJoin the Tax Faculty
The future of tax after COVID

As digital technologies transform society, the UK government is grappling with balancing the books while ensuring its tax system is fit for purpose. Join us as we take a look at the issues and challenges facing the tax system.

Read more

More from the Tax Faculty

Latest news
Making tax digital image

Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter

Practical guidance

Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.

Technical support
Tax Faculty image

Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.