UK plans to make online marketplaces collect VAT on UK sellers' sales from October 2027
This change is proposed and is not law. The rules below describe what would change if it is adopted.
This page records one dated change. For the rules in United Kingdom as they stand today, see the United Kingdom guide →
- Jurisdiction
- United Kingdom
- Tax
- VAT
- Change type
- Registration
- Status
- Proposed
- Impact
- Plan ahead
- Announced
- 28 October 2026
- Effective
- 1 October 2027
- Authority
- HM Treasury / HMRC
- Systems
- E-commerce, Tax engine, Reporting
- Verified
- Fetched from official source · high confidence
Online marketplaces selling for UK businesses, UK VAT-registered sellers on those platforms, and other UK business sellers with annual sales of at least £90,000 per platform.
Online marketplaces: plan to collect VAT on qualifying UK seller sales from October 2027.
E-commerceTax engineReporting
The UK government will legislate in Finance Bill 2026-27 to extend VAT online marketplace liability to UK businesses: marketplaces will collect VAT on sales by UK VAT-registered businesses and other UK businesses with annual sales per platform of at least £90,000. Personal sales, second-hand goods and business-to-business transactions are excluded. The changes are to take effect from October 2027, with the threshold and implementation date set by secondary legislation in 2027.
What changed in detail
This is a proposal, not yet law. At Budget 2026 (28 October 2026) the UK government said it will introduce legislation in Finance Bill 2026-27 to extend the VAT online marketplace liability rules to UK businesses.
Under the proposal, online marketplaces would be responsible for collecting VAT on sales by:
- UK VAT-registered businesses; and
- any other UK business with annual sales of at least £90,000 per platform.
The rules would not apply to non-business (personal) sales, second-hand goods, or business-to-business transactions. The government states the changes will come into effect from October 2027. Some aspects, including setting the annual per-platform sales threshold and the implementation date, are to be implemented by secondary legislation in 2027. The measure follows a June 2026 consultation, for which a summary of responses has been published.
What it means
Today marketplace liability in the UK is aimed at overseas sellers. This extends it to domestic sellers, so a platform becomes the VAT collector for much of its UK seller base. Marketplaces need seller-status data (VAT registration, per-platform turnover) and the ability to exclude personal, second-hand and B2B sales. The £90,000 per-platform figure and the exact start date are still to be fixed in 2027 regulations, so build them as parameters.
Proof
Online marketplaces will be responsible for collecting VAT on sales by UK VAT registered businesses and any other UK business with a minimum annual sales threshold per platform of £90,000. The rules will not apply to non-business (i.e. personal) sales, second-hand goods, or business-to-business transactions. The changes will come into effect from October 2027.
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