Selling online? VAT rules could be about to change

Businesses selling through online marketplaces could face changes to the way VAT is accounted for under proposals currently being considered by the Government.

A consultation on extending online marketplace VAT liability to UK-based businesses closed on 18th August 2026. The proposals would potentially make online marketplaces responsible for accounting for VAT on certain sales made by UK businesses through their platforms.

The consultation follows earlier reforms which made marketplaces responsible for VAT on certain sales by overseas sellers. The Government now wants to explore whether similar rules should apply to domestic businesses, citing concerns about VAT non-compliance and the impact on businesses that are meeting their tax obligations.

Who could be affected?

The proposals could be relevant to UK businesses selling goods through online marketplaces, particularly where the goods are already in the UK when they are sold.

The Government is also considering safeguards for smaller businesses that are below the VAT registration threshold, including a potential minimum sales threshold or VAT relief.

Importantly, this is a proposal, not a confirmed change in the VAT rules. The consultation is intended to gather views on how the system could work and its potential impact on businesses and marketplaces.

For businesses selling through platforms such as online marketplaces, it is therefore worth keeping an eye on how the proposals develop.

Selling through an online marketplace?

If you sell through an online marketplace and want to understand how potential VAT changes could affect your business, get in touch with our tax team for support.