The issue of VAT compliance and marketplace sellers, especially those from overseas, has long been a hot topic on Tamebay. Here’s the last post we made on the subject: MP seeks more action to tackle overseas marketplace sellers dodging VAT.
One possible solution that has been mooted on these pages is that rather than leaving it up to individual sellers to fulfil their various marketplaces, such as eBay and Amazon
And thanks to a tip-off from Taxmen, who are experts in ecommerce tax matters, it looks like in the deeper recesses of the UK’s 2017 Spring Budget document there is evidence that such an idea is on HM Government’s radar. As of the 20th March they will be asking for input into a consultation into what they term as “split payments.”
In the Annex of the budget you can find here (section 2.28) the Government says: “As announced at Budget 2016, the government is considering alternative methods of collecting VAT. This is in addition to the measures it has already introduced to tackle the problem of overseas businesses selling goods to UK consumers via online marketplaces without paying VAT. At Spring Budget 2017, the government will publish a call for evidence on 20 March 2017 on the case for a new VAT collection mechanism for online sales. This would harness technology to allow VAT to be extracted directly from transactions at the point of purchase. This type of model is often referred to as split payment.”
What do you think about this? On one hand it does put a perhaps welcome pressure on sellers on UK marketplaces who sell from overseas jurisdictions but stretch HMRC’s powers and resources. But equally, knowing how the marketplaces can sometimes operate punitively (and perhaps cack-handedly), do you really want eBay or Amazon, or anyone else, meddling in your tax affairs?
We’ll doubtless report on this story again soon when we know more.