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Autumn Budget 2017: Joint and several liability for VAT extended to online marketplaces

Autumn Budget 2017: Joint and several liability for VAT extended to online marketplaces

  • United Kingdom
  • Tax planning and consultancy - Budget

22-11-2017

The inaugural Autumn Budget seeks to ensure a level playing field between online marketplaces and physical stores in the context of VAT. The Finance Bill 2017-18 will extend joint and several liability in the VAT Act to online marketplaces by virtue of a notice issued by HMRC to the online marketplace. If there is a failure to account for VAT to HMRC by a selling UK business then the relevant online marketplace will be liable for the equivalent amount.

Where a non-UK business selling goods through an online marketplace fails to account for VAT and is not registered in the UK for VAT purposes then the liability will extend to the online marketplace if they knew or should have known that the non-UK business should have registered.

The Government will also introduce an obligation for online marketplaces to ensure that the VAT numbers of businesses selling goods on their marketplace are displayed. Regulatory penalties will support the enforcement of this measure.

By introducing this measure, the government is building on its package of measures announced at Budget 2016 to tackle online VAT evasion and non-compliance in the tax system and reduce the tax gap.

Please view our dedicated Autumn Budget 2017 hub here. It will give you access to our watch list, our contributors and relevant articles and tweets.

www.eversheds-sutherland.com/autumnbudget

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